TotalEnergies, holding a 40% interest in the Oil Mining Lease (OML) 58 onshore license, alongside the Nigerian National Petroleum Company Limited (NNPC) with a 60% interest, has signed a $550 million Final Investment Decision (FID) to develop the Ubeta gas field. This significant development marks a milestone in Nigeria’s energy sector and is located approximately 80 km northwest of Port Harcourt in Rivers State.
Ubeta Gas Field and Existing Infrastructure
The OML 58 license includes the Obagi oil field and the Ibewa gas and condensate field, both currently in production. The gas produced is processed at the Obite treatment center and supplied to the Nigerian domestic gas market and the Nigeria Liquefied Natural Gas (NLNG) plant.
Discovered in 1964 in the eastern Niger Delta, the Ubeta field is expected to produce around 350 million standard cubic feet per day (MMScf/day) of gas and 10,000 barrels per day (BBLS/day) of associated liquids once operational. This will significantly contribute to securing gas supplies for NLNG Limited.
Strategic Significance and Government Support
At the FID signing ceremony, held at the NNPC Towers in Abuja, NNPC’s Group Chief Executive Officer, Mele Kyari, acknowledged the supportive fiscal environment fostered by the Presidential Executive Order, which was instrumental in reaching this milestone.
Mike Sangster, Senior Vice President of Africa, Exploration & Production at TotalEnergies, emphasized the importance of the Ubeta project in the company’s strategy of developing low-cost and low-emission projects. He noted that the project aligns with recent government incentives aimed at non-associated gas developments, reinforcing TotalEnergies’ commitment to contributing to the Nigerian economy through increased NLNG exports.
Government and Industry Responses
Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), and Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), both highlighted the government’s efforts to rekindle investor confidence and create a conducive environment for investment in the gas sector. They emphasized that the Ubeta project stands as a testament to the effectiveness of these policies.
Project Development and Impact
The Ubeta field development will involve a new six-well cluster connected to existing facilities through an 11 km buried pipeline. Production is expected to commence in 2027, reaching a plateau of 300 million cubic feet per day (70,000 barrels of oil equivalent per day including condensates). Gas from Ubeta will supply the NLNG plant on Bonny Island, which is expanding its capacity from 22 to 30 metric tonnes per annum, with NNPC holding a 49% interest.
The project will leverage existing gas processing facilities at OML 58 and is designed to be low-emission, featuring a 5 MW solar plant under construction at the Obite site and the electrification of the drilling rig.
Local Content and Economic Benefits
TotalEnergies and NNPC are committed to enhancing local content, with over 90% of man-hours to be worked locally. The Ubeta project is expected to stimulate economic activities, create job opportunities, and provide significant value for stakeholders.
Olu Verheijen, Special Adviser to the President on Energy, highlighted the project’s alignment with Nigeria’s energy policy and its potential to attract further investments. She noted that the Ubeta FID aligns with the recent Presidential Directives on Gas and the Petroleum Industry Act, aimed at closing gaps in Nigeria’s gas sector.
In December 2023, President Bola Tinubu endorsed initiatives to revitalize investment in Nigeria’s oil and gas sector, leading to this $550 million investment. These directives promote fiscal incentives for gas utilization, enhance local content competitiveness, and streamline contracting costs.
