LEKOIL (AIM: LEK), the oil
and gas exploration, development and production company with a focus on Africa,
has commenced its second export of cargo from Otakikpo Marginal Field
("Otakikpo") in OML 11.
A statement by the company noted that
shipment, approximately 250,000 barrels of gross production was been lifted
from the FSO Ailsa Craig by Shell Western Supply and Trading Limited
("Shell Trading"), a subsidiary of Royal Dutch Shell (LSE: RDSA,
RDSB).
Under the terms of the Crude Sales
Agreement with Shell Trading, the Company is due to receive its share of the
payment for this crude within the next month.
With regular liftings from
Otakikpo underway, the Company does not intend to provide updates for each
export. The Company expects to provide export updates concurrent with the
Company's reporting dates going forward.
Current production at
Otakikpo is approximately 5,500 bopd. The Company continues to focus on ramping
up to Phase One target production of 10,000 bopd.
Otakikpo is sited in a coastal swamp
location in oil mining lease (OML) 11, adjacent to the shoreline in the
south-eastern part of the Niger Delta. LEKOIL Nigeria exercises the rights and
benefits of its 40% participating and economic interest in Otakikpo via the
Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014 with Green
Energy International Limited ("GEIL"), the Operator.
The Company holds 90% of the
economic interests in LEKOIL Nigeria. LEKOIL Limited's economic interest in
Otakikpo therefore equates to 36%. The Otakikpo Joint Venture (LEKOIL as
Financial and Technical Partner to GEIL) began operations in December 2014.
Ministerial consent was granted by the Honourable Minister of Petroleum
Resources of Nigeria in June 2015. LEKOIL funded the costs of development and
is entitled to recover this expenditure preferentially from 88 per cent. of
production cash flow from Otakikpo.
The Otakikpo Field
Development Plan consists of two phases. Phase 1 comprises the recompletions of
two wells, Otakikpo-002 and Otakikpo-003, with the installation of an Early
Production Facility of 10,000 bopd capacity and export via shuttle tanker.
Phase 2 covers the subsequent incremental development of the rest of the field
with a new Central Processing Facility and new wells expected. Otakikpo
commenced commercial production in 2017.
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