• Targets crude, gas output in 24-month devpt programme

The prevailing crude supply dispute in the domestic refining industry will soon be resolved as the nation’s largest refiner, Dangote Industries limited, has activated field reentry programme that would see West Africa Exploration and Production Company (WAEP) producing from the estimated 1.6 billion barrels of reserves at oil mining leases (OMLs) 71 and 72.

Already, the Africa’s leading industrial group has plucked the nation’s petroleum industry exploration chief, Mrs Olajumoke Ajai, from her Ingentia Limited where she has demonstrated uncanny early production strategy by harnessing contiguous third-party crude oil handling facilities under a shared infrastructure arrangement.

Oracle Intelligence reports that Mrs Ajayi who is now the Managing Director and Chief Executive Officer at WAEP is also the current Chairman of the Nigerian Association of Petroleum Explorationists (NAPE), the nation’s body of professional geologists and mining experts in the petroleum industry.

Dangote Group declared weekend that WAEP is intensifying efforts to unlock more than 1.6 billion barrels of oil in place and about 1.9 trillion cubic feet of gas across its Nigerian assets, as the company targets sustained production growth and gas monetisation within the next 24 months.

Ajayi disclosed at the just concluded AOW Energy Conference in Accra, Ghana, that the company has outlined a phased strategy aimed at reviving production from the company’s brownfield assets, generating early cash flow and reinvesting the proceeds in broader field redevelopment.

Ajayi said the company’s OML 71 and OML 72, formerly operated by Shell, contained substantial remaining resource potential based on discoveries to date, presenting WAEP with an opportunity to demonstrate how indigenous operators can extract greater value from mature Nigerian oil and gas assets.

In her remarks, the exploration captain examined the capacity of African-owned exploration and production companies to develop the technical, financial and institutional capabilities required to compete at scale and assume a larger role in the continent’s upstream industry.

She said the immediate objective was to identify and exploit the quickest production opportunities within the assets, use the resulting cash flow to finance further investment and progressively undertake more extensive redevelopment.

“The first thing is to look at the low hanging fruit, the short-term oil gains, generate cash flow from that, put it back into the assets and start redevelopment. And that’s exactly what is happening currently,” she said.

She told the conference delegates that the strategy has now moved into a major execution phase, adding that WAEP have signed up three jack-up rigs to commence drilling in December.

“We will be drilling to ramp up production and also bring out the value in the asset,” Ajayi said.

According to the Dangote Group, the drilling programme would be supported with six field development studies to establish the technical and commercial foundation for developments across the portfolio.

The combination of immediate production opportunities, development drilling and field planning is expected to establish a sustained pipeline of activity beyond the initial drilling campaign, potentially transforming WAEP’s brownfield portfolio into a progressively expanding production base.

A major advantage for the company, she said, is its relationship with Dangote Petroleum Refinery and Petrochemicals, which could provide a ready domestic market for WAEP’s crude as production rises.

Ajayi pointed to the ownership structure of the assets and the presence of the Dangote Group’s refining business as an important potential link between upstream production and domestic crude processing.

“One of the shareholders, one of the partners on this asset, is the owner of the largest refinery in Africa, Dangote Petroleum Refinery and Petrochemicals. So, the oil would definitely be needed by the refinery,” she said.

The arrangement could deepen the integration of Nigeria’s upstream and downstream petroleum sectors by creating a direct commercial pathway for domestically produced crude into one of the country’s largest refining facilities.

Beyond production and refining, Ajayi said WAEP is also considering investments in crude evacuation infrastructure and working towards establishing a dedicated terminal to facilitate the evacuation of crude as output increases.

The proposed facility could potentially serve WAEP as well as other producers seeking to aggregate and evacuate crude, creating another commercial opportunity around shared infrastructure while addressing one of the persistent constraints confronting Nigerian oil producers.

Ajayi noted that the success of African independent operators will ultimately be measured by their ability to convert acquired brownfield assets into sustained production, cash generation and long-term value.

She said operators taking over mature and brownfield assets must combine access to capital with technical competence, operational discipline and strong organizational structures capable of sustaining production over time.

“We need to put round pegs in round holes. We need to put the right skill and competence in the different units,” she pointed out.

Ajayi said WAEP had therefore been deliberate in strengthening its technical and organisational capabilities as it prepares for an expanded development programme.

Oracle Intelligence reports that the emphasis on competence and institutional capacity reflects the broader challenge facing indigenous operators as they increasingly acquire assets divested by international oil companies. While such transactions provide indigenous companies with greater ownership of hydrocarbon resources, the operators face the challenge to demonstrate ability to manage technically complex fields, mobilise capital efficiently and maintain production reliability.

In placing the company’s field development plans within timelines, Ajayi said WAEP expects to have significantly increased production and established gas monetisation infrastructure and commercial arrangements within the next 24 months.

“Between now and the next 24 months, gas monetisation would have been in place. We would have ramped up production consistently,” she said.

The objective, she stressed, is not simply to achieve short-term production spikes but to establish a dependable production base capable of generating sustained revenues for reinvestment.

“Not produce today, tomorrow you are down. Consistent, sustained production,” Ajayi said.

Oracle Intelligence reports WAEP is positioning its OML 71 and OML 72 portfolio to tap from Jumoke’s strategies at Ingentia where she utilized shared infrastructure arrangements in achieving quick-to-market field development and early cash generation.

With more than 1.6 billion barrels of oil in place, 1.9 Tcf of gas, three jack-up rigs contracted, six field development studies under way, solid group capital base and a waiting domestic crude market, WAEP appears well positioned deliver on Jumoke’s targets abd timelines.