Olufemi Soneye: What Utapate Light Crude Means for Nigeria’s Economic Growth

In this interview with Venessa Obioha, the Chief Corporate Communications Officer of the Nigerian National Petroleum Company Limited, Olufemi Soneye, explains all there is to know about the Utapate sweet crude blend which was officially launched on the international stage. According to him, the Executive Orders of President Bola Tinubu have created an enabling environment which makes the job of the company easier. Excerpts:

All the talks about Utapate Crude need expatiation. What is it all about, specifically, OML 13?

Since Mr. Mele Kyari assumed the role of Group Chief Executive Officer (GCEO), of NNPC Limited, he has significantly enhanced oil production in Nigeria, driving remarkable and unprecedented transformation in the upstream sector.  This has even been made possible and easier by some of the Executive Orders of  President Bola Ahmed Tinubu.  Without some of the reforms engendered by those presidential orders, some of the giant strides being recorded may not have been possible. 

First, let me state that the good news is that the reserves of OML 13 are 330 Million barrels of oil, 45 Million barrels of condensate and 3.5TCF of gas.

The location of the asset in question is Akwa Ibom State, Eket, to be specific.  The field discovery period was between 1953–1987 and is extensively covered by Analogue, 2D & 3D Seismic Data.  The number of fields in OML 13 are, originally, 14 fields in the acreage; 11 under NEPL’s operatorship three farmed out to marginal operators (Qua Iboe, Stub Creek and Eket).  The total coverage area is 1987 sq. km.  In addition, there are two significant discoveries of about 400million barrels and 1.2TCF of gas currently under appraisal.  The average well depth in the field is 3000million.

Its oil export terminal is FSO Tulja Kalyani, 40km Offshore Akwa-Ibom State.

What makes Utapate so important?

Utapate is of the Light Sweet Crude blend and its sulphur content is API 44, 0.065%.

The blend is being processed through unique heat-based treatment and product conditioning in the modern processing facility to improve its properties.

The entry of the Utapate crude oil blend into the market is coming barely a year after the NNPC Ltd announced the launch of Nembe crude oil, produced by the NNPC/Aiteo operated Oil Mining Lease (OML) 29 Joint Venture (JV).  This remarkable achievement signals the commitment of the NNPC Ltd to increasing Nigeria’s crude oil production and growing its reserves through the development of new assets.  As I said earlier, this achievement under Kyari is contingent on the favourable operating environment created by Mr. President.

When did the federal government allocate OML 13 to NPDC (NELP) and when did the execution of the OML13 FTSA agreement commence? People also ask about when the spudding of oil under the NEPL operatorship.  And what is the number of producing fields in the block?

The allocation was done in 2017, while the execution agreement was done in 2019.  The spudding of oil first well under the NEPL operatorship happened on February 1, 2021.

Utapate Field had been the only developed field at the time of take-over.  However, exploration and appraisal activities have been carried out by NEPL/NOSL with 3 field development plans for Akai, Ekim and Ibotio approved with other field development plans underway.

How many number of wells have been drilled since the commencement of the asset redevelopment project?

40 (7 exploratory, 5 appraisal and 28 oil development). The multi-rig Deployment Strategy with a Cluster Drilling Location management was deployed to achieve an accelerated drilling campaign in the OML-13 Acreage, with a 2 x 30,000bopd Oil and Gas processing facility.  The achievement of the first oil during the current field redevelopment was on February 24, 2023

What are the current daily and monthly production rates?

The daily production rate is between 40,000 and 41,000 bpd. The monthly production is about 1.2mbpd

In terms of production increment, what are we looking at?  

We are looking at additional development drilling in 2025 and 2026 and the construction of a Main Flow Station (MFS) processing facility of 100000barrels of oil capacity and 250MMSCF to incorporate production from other fields within the block as well as 3.5 million barrels of crude oil terminal and Single Point Mooring for export.

What’s the total number of export cargoes?

I’m pleased to say that five of seven cargoes planned for 2024 have already been achieved.  The date of the first export was on July 24, 2024.

The sixth cargo will be loaded on November 28, 2024.  The seventh cargo will be loaded in December 2024.

The method of crude oil evacuation from OML13 is a subsea pipeline, barging and storage on FSO for export.

The Utapate field development plan, executed between 2013-2019 and approved in October, included converting wells and facilities from swamp/marine to land-based operations.  The plan involved a multi-rig drilling campaign for 40 wells and the development of significant infrastructure such as production facilities, storage tanks, a subsea pipeline and an offshore loading platform to facilitate crude oil evacuation and loading.

In terms of equity structure with partners, what is in place? 

It is currently operated by NNPC E&P Limited and Sumedha Energy Limited. The equity structure is at 55%:45%, respectively.

Over the years, such exploration projects have suffered the consequences of community resistance.  What is being done to keep the oil flowing?

We have in place the Spud-Baby Programme, a Community Support Programme for mothers whose children are born on certain drilling days within the entire 13 local government areas, by offering grants to support the mothers and the newborn babies.

We have enjoyed peaceful co-existence with our host communities. The incorporation of OML 13 HCDTF is also progressing well.