Oil is the mainstay of the Nigerian economy.
An independent upstream oil and gas exploration and production company, Afren Plc, has said it has discovered a significant light oil accumulation at the high impact Ogo-1 well located on the Oil Prospecting License (OPL) 310 licence offshore Nigeria. The discovery is based on the results of drilling and wireline logs.
The firm said this week, that the Ogo-1 well has been drilled to a total measured depth of 10,518 feet (ft) and has encountered a gross hydrocarbon section of 524 ft, with 216 ft of net stacked pay.
“The well was targeting 78 million barrels of oil equivalent (mmboe) of gross P50 prospective resources, but based on evidence to date; targeted resources are likely to be significantly in excess of previous estimates.
Further evaluation using wireline log analysis is currently underway prior to extending the well to a total measured depth of 11,800 ft to target further high potential zones,” the firm said.
Osman Shahenshah, Chief Executive, Afren, said the discovery of oil in the Ogo-1 well opens up a new oil basin in an under-explored region and represents a possible extension of the West African Transform Margin.
“Based on evidence to date, targeted resources are likely to be significantly in excess of previous estimates, with some high-potential zones still to be drilled.
“We look forward to working with our Partners to realise the full potential of Ogo and our additional prospects on the license,” Mr. Shahenshah said.
The firm said the Ogo-1 discovery, testing a four-way dip-closed structure in the Turonian, Cenomanian, and Albian sandstone reservoirs, confirms the extension of the same cretaceous sandstones that have yielded other significant discoveries along the West African Transform Margin.
Following the completion of drilling operations at Ogo-1, Afren, as well as Optimum and Lekoil Limited, the other partner with participating and economic interests on the block, intend to drill a planned side-track, Ogo-1 ST, which will test a new play of stratigraphically trapped sediments that pinch-out onto the basement high targeting 124 mmboe of gross P50 prospective resources.
As a nation which is dependent on oil for about 80 per cent of its revenues, finance experts have pushed for the strengthening of the nation’s oil production capacity, due to persistent fall in global oil prices, and rising oil theft and vandalisation.
Bismarck Rewane, a finance analyst and Managing Director, Financial Derivative Company, a diversified financial institution, said increase in oil production would help the nation withstand external shock, as may be triggered by the fall in global oil prices.
“The production of oil needs to be bolstered in order to compensate for the fall in oil price. So far, the activities of pipeline vandals and oil thieves have resulted in a loss of crude oil produced. The Nigerian National Petroleum Corporation estimated that Nigeria lost N191bn ($1.23bn) to oil theft and vandalism in first quarter 2013.
“An increase in oil production would help reserves accretion, which will enable the economy to withstand an external shock and will also cater for relevant fiscal spending purposes. Importantly, there is the need to further diversify the country’s export commodities in order to increase revenues,” he said.