Exxonmobil Begins Oil Production at Erha North Phase 2

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 Saves $400m with 65,000 bpd

Exxon Mobil Corporation has announced that its subsidiary, Esso Exploration and Production Nigeria Limited, has started oil production ahead of schedule at the Erha North Phase 2 project offshore Nigeria.

The Erha Phase 2 project is a deepwater subsea development located 60 miles offshore Nigeria in 3,300 feet of water and four miles north of the Erha field, which has been producing since 2006.

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The Erha Phase 2 project includes seven wells from three drill centres tied back to the existing Erha North floating production, storage and offloading vessel, reducing additional infrastructure requirements.

The project is estimated to develop an additional 165 million barrels from the currently producing Erha field. Peak production from the expansion is currently estimated at 65,000 barrels of oil per day and will total Erha field production to approximately 90,000 barrels per day.

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“Executing successful projects such as Erha Phase 2 ahead of schedule and under budget results from ExxonMobil’s disciplined project management approach and expertise,”said Neil W. Duffin, president of ExxonMobil Development Company. “We are able to create additional shareholder value by optimising existing infrastructure, which reduces capital spending requirements and improves capital efficiency.”

Duffin said the ahead-of-schedule startup was supported by strong performance from Nigerian contractors, which accounted for more than $2billion of project investment for goods and services,including subsea equipment, facilities and offshore installation.

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“These contracts are bringing direct and indirect benefits to the Nigerian economy through project spending and employment, consistent with project objectives,” Duffin said.

ExxonMobil expects to its global production volumes this year by 2 percent to 4.1 million oil-equivalent barrels per day, driven by 7 percent liquids growth. The volume is supported by the ramp up of projects completed in 2014 and the expected startup of major developments in 2015.

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The Erha field was discovered in 2004 and initial production commenced in 2006. Operator Esso Exploration and Production Nigeria Limited holds a 56.25 percent interest in Erha North Phase 2, while Shell Nigeria Exploration and Production Company holds the remaining 43.75 percent share.

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