Innovative Success

What are Neconde Energy’s main operations and projects?

Neconde Energy is in a joint venture with the Nigerian Petroleum Development Company (NPDC) to manage OML 42. OML 42 is a swamp asset that was acquired from Shell Petroleum Development Company in 2011. Neconde owns 45% while the other 55% belongs to NPDC on behalf of the Nigerian government. We have gone through a fairly checkered history, from acquisition to date, dealing with such issues as who has operatorship rights and challenges with evacuation of crude due to the 18-month outage of the Trans Forcados Pipeline (TFP), which takes crude from our fields to the Forcados terminal. The outage of the pipeline was a result of the insurgency in the Niger Delta. That long outage led us to experiment with barging as an alternative method of crude evacuation.

How does the new barging line of business change Neconde’s operations?

We had to recreate the TFP using boats, barges, and so on; we transported produced oil from the well into a vessel that would sail down a river or creek to a floating storage vessel that accumulates crude until it has enough volumes for export. This completely changed the nature of our company. We used to be just an oil and gas company but have now also become a marine company. A major part of the challenge of the experimentation was trying to keep all the elements working in sync to replicate the seamless flow through a pipeline.

What is the advantage of barging over using the TFP?

Barging is not necessarily cheaper; however, it gives us the assurance that we can always produce. Since the TFP became operative again, there have been considerable improvements in its up time. However, the pipeline still goes down every four to five weeks because of leaks; it is over 40 years old and has been abused by all the attempts to steal crude from it, the bombings, and bunkerings. When it goes down, production has to be stopped. One feature of this production is we need to nurse our wells and take great care of them. With barging, we are no longer exposed to shutdowns as a result of TFP outage. This also means we are better able to maintain our wells at peak performance.

What is your strategy and timeframe to achieve your goal of 100,000bpd from OML 42?

The alternative pipeline solution is a key component in achieving and sustaining that level of production. It is one thing to attain a level of peak production; it is another thing to keep production going at the peak. More importantly, following the restoration of the TFP, we have a lifting of the restrictions that we had earlier and can at least produce and export products. Later in the year, we have a number of major interventions that we have to carry out and a number of additional wells we need to drill; through these, we expect to achieve a production level of 110,000bpd by the end of 2018.

What do you expect from 2018?

2018 will be more of a consolidation year; we would like to have high targets that we want to meet and surpass, though we are also looking at the macroeconomic environment and the fiscal enablers. We would like to see more of a settlement of the questions around the Petroleum Industry Bill. Removing that cloud from the business environment would also make additional investment easier because a bad bill is better than the uncertainty of the current moment. I am also hopeful that with more of the things that we are doing in Neconde, we will begin to see an end to the restiveness of the Niger Delta in 2018.