Total SA (NYSE: TOT) said on Jan. 3 it had started production from the Egina oil field off Nigeria’s coast, part of a shift by the French energy firm towards deepwater oil and gas projects to its drive cashflow.
Output from Egina, which is located in waters about 1,600 m (5,250 ft) deep, is expected to plateau at 200,000 barrels per day (bbl/d) of oil, Total said. That rate is equivalent to about 10% of Nigeria’s current production.
“Egina will significantly boost the group’s production and cashflow from 2019 onwards, and benefit from our strong cost reduction efforts in Nigeria where we have reduced our operating costs by 40 percent over the last four years,” Arnaud Breuillac, Total’s head of exploration and production, said.
Total is betting on profitable deepwater oil and gas fields in Sub-Saharan Africa, Brazil and the U.S. Gulf area. In Africa, the company is ramping up deepwater projects in the Republic of Congo and Angola.
Total forecasts output from deepwater projects will reach 500,000 boe/d by 2020 and account for more than 35% of cashflow in coming years, compared with about 15% now.
Total also said it would take a decision this year on whether to invest in developing the Preowei field, located in the same block as the Egina field.
Total has for almost a decade been extracting oil from a third field in the block, Akpo. It holds a 24% stake in the block’s lease and is the operator. Its partners are state-owned Nigerian National Petroleum Corp., China’s CNOOC , Brazil’s Petrobras (NYSE: PBR) and private Nigerian firm Sapetro.
The French company is one of the strongest players in African oil, holding the largest proven reserves on the continent among the world’s top oil companies.
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