Leading independent oil producer, Showline Natural Resources Limited, has disclosed the company’s ongoing effort to ramp up production from its asset to 60,000 barrels per day (bpd) from the current 45,000bpd in the next 18 months.
Speaking with THISDAY on the oil and gas industry’s outlook for 2022, Showline Chief Executive Officer, Mr. Ladi Badia, stated that the company was at advanced stage to monetise the huge gas reserve it has on OML 30.
“Right now, we are producing in the region of 45,000 barrels a day and our plan is to within the next 18 months increase that by at least between 30 to 50 per cent, to go from roughly 45, 000 barrels a day to at least 60,000 barrels a day. So, that is our plan by the end of 18 months from this January,” he stated.
He said the company was planning to build a central gas processing plant, similar to the Utorogu Gas plant in Delta State, at its location.
According to Badia, “That plan is ongoing. It still needs quite a lot of technical work, get some approvals from our funding partners.”
Badia also predicted an improvement in the oil and gas industry’s capital expenditure (Capex) in 2022.
The operator of the Oil Mining Lease (OML) 30 and Trans-Forcados Pipeline said the improvement in capex would lead to the reactivation of exploration and production projects that were suspended in the last months.
He said both the rising oil prices and the improved base oil production provided for in the 2022 budget, would encourage oil companies to produce more oil this year.
Badia explained that the difficulty experienced in the past 18 months resulted in most of the oil companies having to prioritise current operational expenditure (OPEX) and foregoing growth in terms of further expenditure in capex.
He added: “First of all, the fact that we are coming out from a very difficult last 18 months, with lower prices, will encourage production with this relatively outright increase in this 2022 budgetary year.
“We also believe that because the prices are building up at around $70 to $80 per barrel, all the capital projects or at least most of the capital project that were suspended or put on hold in the last six months will start coming back on stream.
“We believe that over the last few years, most of the oil companies have really been involving themselves in the current operational expenditure and foregoing growth in terms of further expenditure in capital expenditure.
“That Capex could be anything, from drilling for more oil or expanding the present production that they have. But with this oil prices, we believe that’s the biggest change we are going to see.”
He said the difficulty experienced by the industry had taught many companies that good times don’t last forever, stating that such experience would hopefully lead to more prudent pricing of contracts.
He said with hard lesson learned, throughout the whole value chain, there would be more efficiency in the way contracts are priced throughout the whole value chain of the petroleum sector.
He added that the oil companies would also be sensitive with the way and timing by which contracts are brought into completion.