The Federal Government has deferred the Final Investment Decision (FID) on $12.5 billion Bonga South West Aparo deep-water project to the second quarter of 2015.
Our correspondent gathered that besides the Federal Government, a major stakeholder in the 3.2 billion barrels recovery project, has through the Nigerian National Petroleum Corporation (NNPC), been demanding “high level of local content on the integration work needed for the planned Floating Production Storage and Offloading (FPSO) vessels.”
A report by the Nigeria Focus monthly, which exposed this, added that the Federal Government had already shown preference for the project “to be carried out at the Ladol facility in Lagos.”
The postponement of the FID is a disappointment for Samsung and Hyundai, the two South Korean firms leading the hunt to secure the contract for what will be one of the biggest FPSOs in the world.
Vice-President, Nigeria & Gabon Shell Upstream International, Markus Droll, had earlier said the FID on the Bonga South West would be taken by the end of 2014.
He explained that the Bonga project is an expansion that will cost $12.35 billion to develop, but the new report, noted that the government had deferred the major decision “to the second quarter, 2015, if not later.”
One of the factors liable for this, according to the report, is that the Minister of Petroleum Resources, Diezani Alison-Madueke, is reportedly demanding high level of local content for the planned FSP vessels, which she prefers to be done at the Ladol facility.
The NNPC, according to the report, has also arranged that the FID is accompanied by board approval on contract awards for the project and may not be ready on the latter issues.
Spokespersons for NNPC and Shell declined comments on the FID deferment, but the report, however, noted: “Uncertainties in the budgeting process caused by the fall in the oil price have made the delay inevitable. It also seems that NNPC management wants to wait until after the federal and presidential elections in mid-February when more ministerial time will be available.”
The technical bids were conducted in the first quarter of 2014 in order to assess and apportion local content. Following the technical phase, the commercial bidding phase is expected to begin once the FID is in place.
The concept selected by SNEPCo involves a regional capacity vessel with 44 subsea wells (22 production and 22 water injection) drilled in two phases.
The project spans three blocks-oil mining leases 118, 132 and 140. Massive in scale, the Bonga South West Aparo project aims to develop 3.2 billion barrels of oil initially in place from eight turbidite reservoirs accessed at a deep-water depth of 1300 metres.
The field development plan that has emerged from the define phase of the project targets ultimate recovery capacity of 804 million barrels in two phases. Planned production capacity is 250, 000 barrels per day with the first oil scheduled for late 2020.
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