Shell’s Bonga oil field exported its one billionth barrel on February 13, 2023. It is a feat hardly achieved by any oil field in the world but Bonga it is one billion barrels production and still counting. It is a milestone achievement for Shell, Nigeria and all stakeholders. EMEKA UGWUANYI reports.
Like the goose that lays golden eggs, Bonga has impacted Nigeria and its economy in many positive ways. Testaments from Nigerians and non-Nigerians abound. It created value in different areas – local content, empowerment, value contributions to government and the economy.
From oil prospecting licence (OPL) 212 to oil mining lease (OML) 118, Bonga field, which sits in 1000-metre water depth and 120 km offshore Nigeria, has been Nigeria’s star deepwater asset.
Bonga, began production on November 2005 and made history by achieving export of one billion barrels on February 13, 2023. Bonga is celebrated always in Nigeria not just because of its production and immense value creation but for opening a historic space that was exceptionally dreaded.
Deepwater production comes with several hazards as a result of the extreme weather conditions which make oil and gas production from it a major technical and environmental challenge. The hazardous nature comes with enormous costs both to lives and resources but Shell through its exploration and production arm in Nigeria – Shell Nigeria Exploration and Production Company (SNEPCo) was able to weather storm with its safety consciousness and application. Today, the rest is history and with great excitement Shell global, Shell Companies in Nigeria, Nigerian Government and its people celebrated the export of one billionth barrel from the asset on February 13, 2023.
Speaking on the one billion barrels production milestone, the Group General Manager, National Petroleum Investment Management Services (NAPIMS), Mr. Bala Wunti, said Bonga is world class asset with world class operations and management, adding that the asset has created enormous value for the country.
He said: “When I visited Bonga, it was very clear after 17 years of operation, and the way and manner the asset was managed was a clear demonstration of world class operations and management. The fact that we are able to achieve one billion barrels production milestone is a clear demonstration that indeed the SNEPCo management and staff have absolutely indicated that they are world class managers.
“Bonga is the first of them all. It is the one that heralded Nigeria’s deepwater operation. It was as a result of its success that others followed. Since 2005 when it commenced operation after the field was founded in 1999, it has produced at least on the average almost 5.9 million barrels monthly and that translates to a cargo after every five days and that is a significant milestone. Besides, how many fields in the world have crossed one billion barrels production milestone.
“Therefore, in the comity of deepwater, it is really relevant and we appreciate the fact it is the best thing Nigeria has done to take the final investment decision (FID) on Bonga.
“Nigeria has achieved significant dividends from Bonga. If you look at government’s total take from the asset’s output, over 40 per cent of the production is lifted by Nigerians under the government take – comprising royalties, taxes and profit oil. The volume has significantly generated huge resource and financial benefit for country. But beyond the country, all the partners including the co-venturers and stakeholders have also generated significant value. Look Bonga as a whole, it has clearly delivered on its mandate fare more than we expected.”
For the Managing Director of SNEPCo, Elohor Aiboni, achieving one billion barrels production was indeed a milestone and a moment to thank everyone who contributed to the achievement. She said: “I’m tremendously appreciative of everyone that has played key role in bring Bonga to this remarkable milestone. I’m grateful to our employees, contractors – past and present, including all the past managing directors who are as excited as us today.”
Former spokesperson of the company, Mr. Precious Okolobo, aptly captured the one billion barrels production milestone event, which happened on the eve of Valentine’s Day.
In his report entitled “Bonga: The journey to 1 billion barrels”, Okolobo said: “Bonga interfered with the eve of Valentine’s Day mood in Nigeria on 13 February 2023, and for a good reason. On that day, Nigeria’s first deep-water well, operated by Shell Nigeria Exploration and Production Company (SNEPCo) hit one billion barrels of oil export since first oil in November 2005. The industry and Nigerians cheered the milestone which could also qualify as a new year gift. “One billion barrels is an exciting milestone,” enthused Mrs. Elohor Aiboni, SNEPCo’s first female Managing Director, while the Chief Upstream Investment Officer of NNPC’s Nigeria Upstream Investment Management Services (NUIMS), Mr. Bala Wunti, said, “The place of Bonga in Nigeria’s upstream DNA cannot be overemphasised.”
“What ticks it for the Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, in the one-billion-barrel journey is the resilience, focus and dedication of the SNEPCo team, most of whom are Nigerians. “I feel a strong sense of pride knowing that, today, over 95 percent of SNEPCo staff, including those working on the Bonga FPSO, are Nigerian deep-water professionals, who contribute their quota to the development of Nigeria’s deep-water resources.”
“Indeed, Bonga is the story of man, nature and technology working in harmony in a geological zone that looked forbidden and unforgiving in Nigeria in the 1990s. How else can one describe the challenges of producing oil and gas beneath the world’s oceans at water depths ranging from a few hundred to several thousand metres? The Bonga field is 120kms offshore, in water depths of more than 1,000 metres across an area of 60 square kilometres. Shell took the Bonga challenge by setting up SNEPCo in 1993 as “an organisation capable of finding and delivering hydrocarbons safely, responsibly and economically in Nigeria’s frontier areas.” Shell was not new to the demands and risks in deep-water exploration and production. As far back as 1978, the company began production at the Cognac oil and gas field in the Gulf of Mexico in water depths of 1,025 feet, the deepest in the world at the time.
“Backed by Shell’s global expertise, SNEPCo drilled the first exploration well in 1995, named Bonga, after a local fish species. Bonga 1X led up to further discoveries until first oil was achieved in November 2005. The first export left the field in February 2006. This was Nigeria’s first deep-water production and increased the nation’s output by 10 per cent.
“The Bonga floating, production, storage, and offloading (FPSO) vessel, anchored 120 kilometres offshore in the Gulf of Guinea, is at the heart of the operations in the field. The FPSO hull was constructed by Samsung Heavy Industries in South Korea, and was commissioned by the then First Lady of Nigeria, Mrs. Stella Obasanjo. As an employee of Shell, I was part of a company team that witnessed the commissioning in the SHI yard. We saw an FPSO hull that did not give any indication of the gargantuan size it would assume on the installation of the topsides in Newcastle, U.K. The hull arrived for the outfitting in October 2002 and we also saw how the topsides were fitted with the active involvement of Nigerian engineers who will be the seed staff back home (local content development started very early on Bonga!) The vessel arrived the shores of Nigeria as a 300-metre FPSO and the height of a 12-storey building with a deck roughly the size of three football fields. It receives crude through undersea pipelines that is then offloaded to tankers while the gas is piped to the Nigeria LNG plant. The FPSO has done this safely since 2005 and has even passed the one-billion-barrel mark as I write this.
“Giving any insight to the success story, Mrs. Elohor said an integrated delivery approach, continuous improvement and the support lever offered by the technological prowess of the Shell Group were the pillars of SNEPCo’s excellence delivery. “We are building a leading safe, simpler and cost-disciplined deep-water business that brings value to our partners, shareholders and Nigeria which remains a heartland for Shell,” she said. In practical terms, SNEPCo has developed a team that believes in itself and co-owns the vision of the company. And then the safety culture. In 2016, SNEPCo began “a Safety Leadership Journey” that encouraged people to focus on safety and highlight unsafe working conditions. As part of efforts to drive operational excellence, the company reviewed and revalidated the wells at Bonga through “detailed engineering studies” with the aim to optimise processes and eliminate waste.
“Perhaps, the greatest determinant of Bonga’s success story is the emphasis on technological excellence. With the Shell Group backing, SNEPCo has deployed the best technology to safely produce oil and gas that is making all stakeholders happy. In one example, SNEPCo has deployed a 7th generation, twin-decked rig that cuts drilling times and costs and became the first in the world to perform a well drilling completion operation in a single trip rather than several. The Turn Around Maintenance (TAM) activities on the Bonga FPSO are another testament to SNEPCo’s pioneering role in deep-water technology. There have been seven TAMs since 2005 with the latest being last year, when the exercise was completed in 22 out of the planned 30 days.
“The fourth TAM, done in 2017 was one of the most complex, featuring 373 critical scopes in statutory and regulatory safety checks, inspections, repairs and replacement of equipment and upgrades. They were all closed out in the 36-day shutdown period and just within one week of reopening, Bonga recorded a peak production of 220,000–240,000 barrels per day. It is this kind of laser-focused delivery that has resulted in the one-billion-barrel milestone. The success of Bonga proves the partnership of the Oil Mining Lease 118 holder, NNPC Ltd; the concessionaire, SNEPCo; and SNEPCo’s co-venturers – TotalEnergies EP Nigeria Limited, Nigerian Agip Oil Company, and Esso Exploration and Production Nigeria Limited. The production milestone shows a partnership that is working well.
“Nigeria has every cause to celebrate the milestone. Last year alone, SNEPCo remitted $562 million in corporate tax and payments to government, and another $23 million to the Niger Delta Development Commission (NDDC.) SNEPCo’s operations have inspired several significant discoveries of oil and gas over the last two decades, including the Bolia and Nwa Doro fields, in each of which it has 55 percent interest. SNEPCo has awarded major engineering and construction contracts to indigenous companies, such that the manufacture and rebuild of hydraulic flying leads and refurbishment of old subsea trees are being carried out in-country by wholly indigenous companies.
“As part of SNEPCo’s social investments, over 1,150 students have benefited from both the NNPC-SNEPCo National Cradle-to-Career and the NNPC-SNEPCo National University scholarships since inception of the programme in 2016. Both scholarship programmes aim to promote academic excellence and improve the skills of young Nigerians with a view to building a competent skill pool for the oil and gas industry. Late last year, Nigeria’s Tertiary Education Trust Fund presented an award to SNEPCo for consistent contributions towards the growth of the public tertiary education sector. In 2019, the company launched the Vision First Initiative, taking medical eyecare to various parts of the country. The latest outreach in the programme was held in Lagos recently with more than 2000 people benefitting. Indeed, Nigerians won’t mind if SNEPCo continues to interfere with their Valentine’s Day celebrations. With SNEPCo, the love for Nigeria and its people is real!”
