Yemisi Izuora
Lekoil has announced completion of first crude oil lifting of this year from the Otakikpo marginal oil field in OML 11 by the nominated offtaker, Shell Western Supply and Trading Limited, SWST, a member of the Royal Dutch Shell plc group of companies.
The oil firm expects to receive cash proceeds from this crude oil lifting of US$7.0 million. The next lifting, of a similar quantity, is expected to occur within the next four to six weeks.
For the full year 2019, production from Otakikpo averaged 5,305 barrels of oil a day, bopd gross with 2,122 bopd net to Lekoil and full year 2018: 5,345 bopd gross with 2,138 bopd net. For the first twenty days of this year, production at Otakikpo has averaged 5,860 bopd gross with 2,344 bopd net to Lekoil.
“Otakikpo continues to provide steady production and cashflow for Lekoil. We are delighted with the collaborative progress being made by all parties towards the development and transformation project planned for Otakikpo, that is aimed at increasing production from the field. We remain fully focused to generate value on this asset for all shareholders,” Lekan Akinyanmi, Lekoil’s CEO, commented.
Further to the announcement on 1 July 2019, where the Otakikpo Joint Venture, JV executed a Memorandum of Understanding, MoU, with Schlumberger and a subsidiary of a major international oil company, the parties remain aligned and committed to the expansion project which has the potential, subject to satisfaction of the conditions set as previously announced, to increase production on the field up to 20,000 bopd (8,000 bopd net to Lekoil.
The phased development plan for the project consists of drilling between five (5) and seven (7) new wells as well as the expansion of processing infrastructure which will be financed by a project finance debt facility. A further update on the progress of this project will be provided shortly.
As at 31 December 2019, Lekoil has an outstanding balance, including accrued interest of interest-bearing term loans of US$19.2 million.
The Otakikpo Joint Venture is made up of Green Energy International Limited, GEIL, the Operator, and the Technical Partner, Lekoil Oil and Gas Investments Limited, LOGL, a member of the Lekoil Limited group.
