NDEP Targets Increased Oil Production as Four-well Drilling Campaign in Ogbele Field Nears Completion

*Company posts impressive performance in 2022

Peter Uzoho

The Niger Delta Exploration and Production (NDEP), Nigeria’s first indigenous energy company has said its ongoing Four-well drilling campaign at the Ogbele Marginal Field in Rivers State would be completed in the fourth quarter of 2023.

The company disclosed this in its 2022 performance and strategic operational updates, which was made available to THISDAY.
It declared that it recorded an impressive financial performance in the year ended December 31, 2022. NDEP informed that it had in March 2022, commissioned front-end studies towards the further development of the Ogbele Field, which “culminated in a four-well drilling campaign that began in September 2022, and is expected to be completed in Q4, 2023.”

The Ogbele marginal field, which was carved out of the Chevron Nigeria Limited (CNL)’s onshore asset in Oil Mining Lease (OML 54) in Rivers State, was awarded to NDEP in 1999, in Nigeria’s first attempt to award a marginal field to an indigenous company.
NDEP hit its first oil on the Ogbele marginal field on August 28, 2005 and has metamorphosed into an integrated independent company having different subsidiaries.

The indigenous energy major said it had also commenced the implementation of its Alternative Crude Evacuation (ACE) project, explaining that the objective was to ensure that there were value realisation avenues beyond the traditional Trans Niger Pipeline (TNP) and the refinery business.
To operationalise the ACE, the company said the maiden voyage for crude oil delivery to the Bonny Terminal, through the mother vessel, was completed in December 2022, and that they expect steady state full operations by Q2, 2023.

“Our four-well drilling programme commenced in Q4 2022 and is ongoing. We successfully consummated a few dollar-denominated refined product sale arrangements, which will aid our foreign exchange earnings profile beyond the upstream business.

“Additionally, our Alternative Crude Evacuation project is currently in the pilot phase and we estimate that it will be fully operational in the very near future. Each of these projects has the potential to deliver material returns on capital and further strengthen our production and cashflow generation,” NDEP said.
However, providing an unaudited update on trading of the company for the year ended 31 December 2022, the Chief Executive Officer of NDEP, Mr. Adegbite Falade, stated that the year 2022 had been very tough for the oil and gas industry in Nigeria.

“Notwithstanding, as a result of our strong, resilient and integrated business model, coupled with a focus on capital discipline and operating excellence, the business recorded notable improvements.
“We increased revenue and profit before tax year-on-year and achieved significant diversification of the revenue mix, underscored by very strong growth in the refinery business.

“In 2023, we expect growth in our revenue and further revenue diversification across our various business segments,” Falade stated.
He said NDEP closed the year without any significant safety-related issues, recording a total of 16.14 million manhours with zero time lost due to incident (LTI).
According to him, the company’s total production for the year under review was 1.44 million barrels (mmbbls) and 6.51 billion cubic feet (bcf) for oil and gas respectively.  

The company said its refinery business was the focal point for realising value in 2022, saying refined delivery volumes rose 105.0 per cent to 152.84 million litres relative to 74.53 million litres in 2021.
“This was driven by debottlenecking the refinery production from upstream oil production and actively pursuing its monetisation strategies.
“Capacity utilisation improved to 24.0 per cent from 13.45 per cent in 2021; underscoring further upside potential as well as additional opportunities that exist to further optimise the refinery business.

“In June 2022, the company formally commenced its digital transformation journey through the implementation SAP S/4 Hana, and the integration of other digital tools across its entire operations,” NDEP explained.

To ensure adequate capital for the 2022-2023 drilling campaign, the company said it obtained a $120 million Field Development Facility (FDF) in March 2022.
It explained that the FDF was to supplement the company’s available cash to fund the Ogbele Field Development campaign that commenced in September 2022.
“The company successfully closed a N10 billion bond issue in December 2022, part of a NGN20 billion bond series.  Relevant regulatory requirements and processes are being met and ongoing, and the proceeds from the issue will be used to fund the Ogbele Field Base upgrade, among other works.
“Our 2023 oil hedges were for 3.5kbbls/day at $2.20/bbl. (strike price of $55/bbl.) which runs until August 2023”, NDEP added.