IOCs Exit: NAPE Tasks Local Oil Firms to Explore Nigeria-Sao Tome Basin to Boost Reserves

• JDA promises investors attractive fiscal terms, seeks consortiums

Peter Uzoho

As international oil companies (IOCs) pulled back from further oil search in frontier acreage, Nigerian Association of Petroleum Explorationists (NAPE) called on indigenous oil and gas firms to step in and invest in exploring the Nigeria–São Tomé and Príncipe Joint Development Zone (JDZ) to boost the country’s depleting hyrocarbon reserves.

NAPE made the call at its April Monthly Technical/Business Meeting in Lagos, with the theme, “Joint Development Zone: Hydrocarbon Prospectivity and Exploration Opportunities,” spotlighting the JDZ as a major untapped hydrocarbon frontier.

Nigeria–São Tomé & Principe JDZ is a 34,540-square-kilometre maritime area in the Gulf of Guinea with significant oil potential.

Established by a 2001 treaty, JDZ allows both nations to share resources under a 60:40 arrangement, and operates under the model of Production Sharing Contract (PSC), to manage exploratory and commercial activities.

However, despite high hopes, the area has seen limited success and slow progress, as even the 270 million barrels of crude found in 2006 was deemed marginal and non-commerciable, resulting to the exit of IOCs, including Chevron, Texaco, Total, and others from further exploration in the area.

Speaking at the session, NAPE President, Mrs. Olajumoke Ajayi, underscored the need for Nigeria to move aggressively to replace maturing assets with new oil discoveries.

Ajayi stated, “As explorers, we must continue to explore because oil and gas will continue to play an important role. As we deplete existing reserves, we must open up new frontier areas and bring in more discoveries.”

She said NAPE’s technical sessions this year focused on “exploration, reserve replacement and strategies for unlocking stranded resources”.

The keynote speaker and Senior Geoscience Manager at Juvicle Energy Resources Limited, Mr. Aleksandra Oshodi, said the JDZ was significantly underexplored, despite a proven hydrocarbon system.

Oshodi recalled strong IOC interest from 2003-2005 and Chevron’s 2006 Obo-1 discovery, which confirmed commercial hydrocarbons with more than 270 million barrels of oil equivalent found.

He stated that progress stalled after 2013 because shallow gas-prone targets were not fully commercial under prevailing conditions.

“Operations stalled, but that does not mean the basin failed geologically. What it means is that the earlier play concepts were not fully commercial under prevailing conditions,” Oshodi said.

He added that only eight wells had been drilled across the vast acreage, stating that new reprocessed PSDM 3D seismic technology has identified deeper targets between 3,000 and 4,500 metres.

“These deeper fairways suggest a significant opportunity for a disciplined re-entry into the basin. The system is proven, and modern data is helping us reduce uncertainty,” he said.

In his remark, NAPE President-elect, Dr. Anthony Ofoma, said the focus on JDZ at this time was both timely and strategic.

Ofoma stated, “At a time when the global energy industry is evolving rapidly, conversations around frontier exploration, regional collaboration, and unlocking new hydrocarbon potential have become more important than ever.”

Co-founder and Technical Director at Juvicle Energy Resources, Mr. Clement Onyekwelu, said JDZ offered a timely window for Nigerian firms to step in as IOCs retreated.

Onyekwelu recommended that indigenous firms should form a joint venture and pool their resources together for a coordinated action of fresh exploration in the JDZ acreage.

He said, “There is no better time than now to return to frontier exploration. Other regions are attracting huge value because they are willing to take bold steps into deeper plays. We also have opportunities here that can deliver significant commercial value.

“What we need now is a coordinated effort by home-grown companies that understand the terrain and are willing to invest. Nigerians can lead this process. We have capable professionals and investors who can drive the first wave of new exploration.”

Acting Chairman of the Joint Development Authority Board, Mr. Mohammed Ibrahim, urged local oil firms to come forward and indicate interest to carry out exploration in the frontier acreage, saying the PSC arrangement for JDZ offers better fiscal terms for investors.