By Timothy Oyomare
Barring any unforeseen development, including statutory hiccups, Oil Mining Licence (OML) 40 may increase Nigeria’s oil production by about 15,000 barrels of oil per day by Q2 of 2019 as Elcrest ramps up production.
This follows attempts by Elcrest Exploration and Production Nigeria Limited to ramp up production through a three well drilling campaign to increase output to 30,000BOPD on the acreage, embarking on an aggressive work programme aimed at turning around the exploration asset to a producing asset.
Elcrest, the Joint Venture between Nigerian owned Starcrest and the UK listed Eland Oil and Gas, is aggressively working hard to reach production of 15,000 by the second quarter of 2019.
George Maxwell, chief executive of Eland said: “Gbetiokun has the potential to deliver a 50 per cent increase in oil production from OML 40. “We look forward to updating shareholders on the completion of the Gbetiokun-3 appraisal well in January 2019.”
The OML 40 licence holds proved and probable reserves of 83.4 million barrels of oil and was the least developed of all the 11 onshore OMLs from which Shell and partners divested (selling their equities to Nigerian firms and quasi Nigerian firms) between 2010 and 2015.
OML 40 licence is also due for renewal. If the 2017 Service Requirements as released by the Department of Petroleum Resources (DPR) subsists, then, companies applying to renew their oil license or leases may pay a statutory fee of $2 million, while conversion from OPL to OML may cost $1 million.
This may also be preceded by statutory application fees of $2,500 for marginal oil field and $5,000 for applications relating to OPL. For OML, statutory application fees of $10,000 are required.