Chevron, NNPC make Niger Delta oil find

Chevron and state-owned Nigerian National Petroleum Company have made a new oil discovery in the Niger Delta, the US energy company said, as fellow IOCs race to exit the troubled region.

The "near-field discovery" was made by the Meji NW-1 spud in Petroleum Mining Lease 49, representatives of Chevron told S&P Global Commodity Insights in a statement Oct. 18. The block is located in the shallow offshore area of the Western Niger Delta.

The spud reached a depth of 8,983 feet and encountered 690 feet of hydrocarbons within Miocene sands, effectively extending the producing Meji field. The well operations were completed Oct. 2, Chevron said.

“This accomplishment is consistent with CNL’s intention to continue developing and growing its Nigerian resources, including the onshore and shallow water areas,” the company said in the statement, “and supports Chevron’s broader global exploration strategy to find new resources that extend the life of producing assets in existing operating areas and deliver production with shorter development cycle times.”

Chevron operates PML 49 alongside NNPC in a joint venture. The US firm holds a 40% stake in the block and NNPC owns the rest. It was previously known as OML 90 but was converted recently in line with the new Petroleum Industry Act of 2021.

According to data from S&P Global Commodity Insights, production from the Meji field peaked at 51,000 b/d in 2005 but has since fallen to some 17,000 boe/d, most of it crude oil.

Discoveries were first made on the license in 1965, with production starting four years later.

Staying put

Chevron did not offer a timeline for production at Meji NW-1 or any detail on how much the asset could produce. The company declined to comment further.

Nevertheless, the find comes as a boost for Nigerian officials and illustrates the contrast with Chevron’s peers, who are leaving the Niger Delta in their droves in favor of deep-water opportunities in Nigeria, less risky jurisdictions and frontiers like Namibia and Guyana.

Eni has already quit the Nigerian onshore and shallow water, selling its business to local firm Oando.

Meanwhile, Shell has agreed to sell its onshore business to the Renaissance consortium of five mostly local companies, ExxonMobil has signed a deal with Seplat and Equinor and TotalEnergies are selling assets to Nigeria-focused Chappal Energies.

The transactions have been met with sluggish approvals and, in some cases, official opposition.

Chevron has sought to reaffirm its commitment to Nigeria’s oil sector, however, winning praise from Nigeria’s government and NNPC boss Mele Kyari.

On Sept. 9, the NNPC said Chevron was targeting a “significant” production boost to 165,000 b/d from five of its key licenses by the end of 2024 after converting the blocks to meet the terms of the PIA.

In January the US oil giant acquired a stake in Oil Prospecting License 215 -- an exploration block -- in the offshore Niger Delta.

Chevron is thought to be Nigeria’s third largest producer, with stakes in 62 assets according to Commodity Insights estimates, including the prolific 90,000 b/d Agbami field and Escravos oil projects.

Nigerian officials have been battling to stem the tide of IOC departures in recent months, having seen oil output fall from a peak of 2.45 million b/d in 2005 to 1.46 million b/d today, according to the Platts OPEC Survey from S&P Global Commodity Insights, thanks to underinvestment, a dearth of exploration activity, field maturation and theft and sabotage of oil installations and pipelines.

The Niger Delta has played host to spills and security issues in recent years, with as much as 300,000 b/d of crude still going missing, Nigerian lawmakers said in April.