Page 12 - AfrOil Week 16 2020

AfrOil POLICY AfrOil
 The government had intended to begin grad- ually lifting subsidies starting with its 2020 budget, but back-tracked on this plan after threats of mass protest. It still promises to end the support eventually, but is yet to shore up a timeframe for doing so.
In late January, Finance Minister Ibra- him Elbadawi described the decision as a “no brainer” and said the government hoped to cut the subsidies over the course of 18 months, beginning as early as March. But the phase-out has not yet materialised. ™
PROJECTS & COMPANIES
Total puts work at Preowei field offshore Nigeria on hold
NIGERIA
TOTAL has put plans for the development of Preowei, an oilfield located offshore Nige- ria, on hold, citing unfavourable investment conditions.
The French super-major has said previously that it hoped to make a final investment deci- sion (FID) on the project in the fourth quarter of 2020 and then bring Preowei on stream in 2023. Last week, though, it indicated that it did not expect to meet these deadlines.
The company did not say when it might take the next step towards launching development. But it did state that it had already informed its front-end engineering design (FEED) con- tractors of the delay. Additionally, it said it had notified its geophysical contractor that it was suspending an ocean bottom node (OBN) sur- vey of the Preowei and Egina fields.
Total also explained that it had based its deci- sion on three factors – namely, the coronavirus pandemic, the decline in world oil prices and new regulations introduced by the Nigerian government. The latter is probably a reference
to the Deep Offshore and Inland Basin Produc- tion-Sharing Contract Act, which took effect last year. The act is likely to increase the tax burden on many international oil companies (IOCs) working in Nigeria.
The French company made its first oil dis- covery at Preowei, which lies north of the Egina field within the block known as OML 130, in 2003. It says that the field holds more than 150mn barrels of oil equivalent (boe) and may eventually produce 50,000 barrels per day (bpd).
Earlier this year, Wood Mackenzie identified Preowei as one of three deepwater Nigerian pro- jects that were likely to be delayed. It named the other two projects as Bonga Southwest Aparo and Owowo and said that the country’s oil out- put might sink by as much as 35% by 2030 if work did not begin on schedule at these three fields.
Both Bonga Southwest Aparo, operated by Royal Dutch Shell (UK/Netherlands), and Owowo, operated by ExxonMobil (US), are due to come on stream in 2025. ™
First oil at Preowei is not likely to occur on schedule in 2023 (Image: Total)
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w w w . N E W S B A S E . c o m Week 16 22•April•2020