Share
Olugbemi. Adeyinka Ogunleye
4 months ago
Overview
REVIEW: On Shell's Bonga North FID
Let me give some perspective on this FID in case you missed Arise Exchange last night.
First of all, Olu Verheijen — SA to President on Energy deserves her flowers for the relentless hardwork behind the scenes.
SNEPCo and its partners have had to rework the shelf life of the FPSO that serves Bonga Main, Bonga North-West and the coming Bonga North (16 wells; 8 producing and 8 for water re-injection) from 2029 in order to enable them develop the tie-back plan that wouldn’t require them to build a new floating, production, storage and offloading subsurface structure.
Bonga Main started producing in 2005, Bonga North-West came into production in 2014, Bonga North, which is what this announcement is for will achieve first Oil in 2029-2030 (with a shelf life of 10-Years)
The estimated ultimate recovery when you divide the enterprise value of the asset by the 2P (proven and probable) reserves is 300m barrels (which is the reason Shell mentioned in their notes that their projected internal rate of return is higher than the hurdle rate)
Let me give you some perspective, Bonga Main and North-West are deep- offshore assets that had their OML 118 block renewed in May 2021 (3months before the PIA was signed into law). Its production sharing contract (PSC terms) that has:
— Shell: 55%
— ESSO (a subsidiary of Exxon Mobil): 20%
— ENI: 12.5%
— Total: 12.5%
The capacity of Bonga Main and North-West is 225k barrels per day but its capacity utilization today is 130k barrels per day.
The reason it’s important to bring up this fact is so you can understand the block within which the new wells will be operating and their current output as compared to their capacity.
Credit : @realkelvin07 on X
