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SNEPCO-Saipem Deal Gives Bonga a Fresh Lease

12 October 2009

The Shell Nigeria Exploration and Production Company (SNEPCO) says it has signed a contract with Saipem Contracting Nigeria Limited for the provision of crude oil flow-lines and the installation of other production facilities for its Bonga North-West offshore project.

This followed a competitive tender and agreement between SNEPCO, the Nigerian National Petroleum Corporation (NNPC/NAPIMS), and Saipem.

Chike Onyejekwe, the managing director of SNEPCO said: “We have chosen a highly qualified contractor for this assignment and our expectation is that the work will be executed safely and within the terms and conditions of the contract. We remain convinced that as a team, we have what it takes to execute this work and deliver a project which will complement the existing and highly successful Bonga offshore project.”

Under the terms of the contract, Saipem will design, fabricate, install, and pre-commission the 13-kilometre subsea flow-lines that will convey crude oil from the Bonga North-West's wells to existing production facilities. It will also install production manifolds, umbilicals, and subsea controls distribution units.

In his response, Yves Inbona, the chief operating officer, Offshore Business Unit, of Saipem, remarked: “For Saipem, it is a new milestone as well as another opportunity to demonstrate our dedication to safety. Saipem Contracting Nigeria holds the best safety record in the entire Saipem Group. This comes as a result of dedication and training by safety experts both in the group and in Nigeria who have a strong commitment to safety in onshore, offshore and in green projects.

“We have been investing in facilities and this contract offers a technical challenge as well as an opportunity to deploy our tested technology with our local partners.”

Bonga North-West

The Bonga North-West project involves the drilling of 12 wells in water depths of 1,200 metres, and provision of associated facilities to tie into the existing Bonga Floating Production and Storage Facility (FPSO).

The initial phase of the project comprises the drilling of five subsea wells. Seven main contracts including the flow-line and the installation contract are planned for the execution of the project.

Early in the year, SNEPCO awarded contracts for other aspects of the Bonga North-West project. The front-end engineering design (FEED) and detailed design of topsides facilities were undertaken by the National Engineering and Technical Company Limited (NETCO) - a subsidiary of the Nigerian National Petroleum Corporation (NNPC), in conjunction with SNEPCo engineers. Weltek Limited is executing the topsides modification work, including procurement, onshore fabrication, offshore installation and hook-up.

Deepwater exploration

Deepwater exploration in Nigeria gained momentum in the late 1980s to the early 1990s with the two-dimensional speculative seismic data acquisition by TGSI-MABON under the guidance of the Department of Petroleum Resources.

The Bonga North-West project is located in Oil Prospecting Licence (OPL) 212. It is part of the 225,000 barrels per day Bonga concession that was awarded in 1993 during the first round of bidding for Nigeria's deepwater frontier acreage with the award of 18 blocks to 12 concessionaires.

Other deepwater assets under the initial bid rounds in 1993 are the 230,000 barrel per day Erha field operated by Esso, the 250,000 barrels per day Agbami field operated by Chevron, the 185, 000 barrels per day Akpo field operated by Total, and the Abo field operated by Agip.

It is operated by SNEPCO on behalf of the NNPC which has 55 per cent interest under a Production Sharing Contract (PSC). SNEPCO has a Joint Operating Agreement (JOA) with Esso Exploration and Production Nigeria (Deepwater) Limited, Nigerian Agip Exploration Ltd (NAE), and Elf Petroleum Nigeria Limited in respect of OPL 212.

The companies have 20 per cent, 12.5 percent, and 12.5 per cent interest respectively.