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LEKOIL inks agreements for Otakikpo JV

LEKOIL has signed agreements for the development of the next phase of the Otakikpo marginal field.

Further to the execution of a non-binding Memorandum of Understanding (MoU), the Otakikpo Joint Venture (JV) has executed agreements with Schlumberger, which covers the infrastructure sharing and field management services for the planned upstream drilling.

The upstream drilling consists of a phased work of up to seven new wells at Otakikpo. The drilling of the first two wells is expected to increase gross production to 10,000 bopd from the gross rates of 5,755 bopd.

“We continue to make progress towards our shared ambitions to drill additional wells and unlock further value for stakeholders from Otakikpo. We are pleased with the Joint Venture’s relationship with Schlumberger, a world-class project execution partner. We are committed to advancing this exciting and transformative project that is aimed at increasing the value and cash generation abilities of the field,” LEKOIL Chief Executive Officer (CEO), Olalekan Akinyanmi, noted.

“As a result of the lower oil price environment and a change of project scope by the Otakikpo JV and other project stakeholders, these project capex estimates are a reduction on previous estimates of $170 million ($68 million net to LEKOIL Oil and Gas Investments Limited) as announced on 1 July 2019.

‘’LEKOIL expects to potentially raise, according to its participating interest, its portion of the required funding from a combination of offtake financing from a subsidiary of a major international oil company and cashflow from existing production,” Akinyanmi said.

The Otakikpo JV signed the infrastructure sharing and utilisation agreement on the production from the Otakikpo marginal field with Integrated Hydrocarbon Infrastructure Limited, a special purpose company incorporated and owned by Green Energy International Limited to build, own, operate and maintain the shared infrastructure facilities (the “ISUA”).

Pursuant to the ISUA, Integrated Hydrocarbon Infrastructure Limited will assume the role of facility operator (from its parent, Green Energy International Limited) and will build, own, operate and maintain certain flow stations, pipeline facilities and terminal facilities to be used for the evacuation of crude oil produced from the Otakikpo marginal field.

Source: The Nation