Lagos joins oil-producing states in Nigeria

Nigerian firm has said it has started oil production from an offshore field in the commercial city of Lagos, the first output outside the country’s oil hub in the Niger delta. “Yinka Folawiyo Petroleum Co. Ltd (YFP) is pleased to announce that it has commenced production of crude oil from its Aje field located in block OML 113 offshore Lagos,” it said late Tuesday. Aje is an offshore field located in OML 113 in the western part of Nigeria in the Dahomey Basin. The field is situated in water depths ranging from 100 to 1,000 metres and is about 24 kilometres from the coast. It contains hydrocarbon resources in sandstone reservoirs in three main levels – a Turonian gas condensate reservoir, a Cenomanian oil reservoir and an Albian gas condensate reservoir. YFP did not disclose the volume of current output from the field but said the company has capacity to produce 40,000 barrels per day. “Oil produced from the Aje field will be stored on the Front Puffin which has production capacity of 40,000 barrels of oil per day and storage capacity of 750,000 barrels,” it added in a statement. Production began after more than 25 years of exploratory, appraisal and developmental activities in the field, making Lagos an oil-producing state. The Chairman, YFP, Mr. Tunde Folawiyo, was quoted in a statement to have said, “The attainment of this milestone is indeed a laudable achievement not just for the YFP, but for the Nigerian oil and gas industry as a whole and indeed Lagos State, which can now be addressed as an oil-producing state.” He said recording the achievement in the present global oil climate, together with the peculiar challenges of the field, was clearly a no mean feat. “We are very proud of and appreciate the efforts, determination and commitment of the entire Aje project team, past and present; the constant support from our regulators, the DPR and Ministry of Petroleum; and our financiers. We believe this crucial support will spur us on to even greater achievements,” Folawiyo added. Nigeria’s oil and gas industry is concentrated in the southern delta states but the region has been visited by unrest and disruption from militants demanding a fairer share of revenue. Pipeline attacks and illegal refining or “bunkering” as it is called locally have hit output, which is currently estimated at about 1.8 million barrels a day, according to OPEC. Nigeria is reliant on oil revenue for its economy but crude earnings have been depleted drastically since the slump in global prices that started in mid-2014.