Crude well: NNPC, Chevron discovers new Niger delta based assets

Nigeria’s goal to increase foreign exchange inflow has received a significant boost following Chevron Nigeria Limited’s announcement of a new oil well discovery in the Niger Delta, producing 17,000 barrels per day. The new well, Meji NW-1, located in Petroleum Mining Lease (PML) 49, is co-owned by the state-run Nigerian National Petroleum Company Limited (NNPC). Chevron described the find as a “near-field discovery” in the shallow offshore region of the Western Niger Delta.

The well reached a depth of 8,983 feet and encountered 690 feet of hydrocarbons in Miocene sands, thus extending the existing Meji field. Chevron stated that operations were completed on October 2, highlighting its commitment to developing its Nigerian resources in both onshore and shallow water areas.

Chevron operates PML 49 in a joint venture with NNPC, holding a 40% stake while NNPC owns the remainder. The block was recently renamed from OML 90 as part of the new Petroleum Industry Act of 2021. Historically, the Meji field’s production peaked at 51,000 barrels per day in 2005 but has since decreased to around 17,000 barrels of oil equivalent per day.

While Chevron has not provided a timeline for production from Meji NW-1, this discovery is a positive sign for Nigeria amid a trend of international oil companies (IOCs) exiting the Niger Delta for deeper waters or less risky regions like Namibia and Guyana. Companies like Eni and Shell have sold their onshore interests, while ExxonMobil and TotalEnergies are also divesting from Nigerian assets.

On September 9, NNPC indicated that Chevron aims to significantly increase production to 165,000 barrels per day from five key licenses by the end of 2024, following adjustments to comply with the Petroleum Industry Act. Chevron is considered Nigeria’s third-largest oil producer, with stakes in 62 assets, including the notable Agbami field.

Nigeria has faced a decline in oil production, dropping from 2.45 million barrels per day in 2005 to 1.46 million barrels per day today, attributed to factors like underinvestment, aging fields, and significant losses from oil theft and sabotage, estimated between 300,000 and 400,000 barrels per day.