Nigeria: an operator revives OML 18 ten years after the departure of the majors

The Nigerian oil sector continues its restructuring in favor of local operators. More than ten years after the purchase of Shell, TotalEnergies, and Eni’s stakes in OML 18, the partners of the block have reinforced the infrastructure for storing and exporting its production.

This new phase relies on the FSO Cawthorne, a floating storage and unloading unit positioned offshore Bonny, in the Niger Delta. With a capacity of 2.2 million barrels, the vessel is designed to receive oil produced from OML 18, store it, and then transfer it to export tankers.

The system was developed by the Nigerian National Petroleum Company Limited, which holds 55% of OML 18, in partnership with Sahara Group, Eroton Exploration and Production, and Bilton Energy. Thus, this is not a project carried solely by Sahara, but a shared infrastructure among the various partners of the asset.

The first loading of 950,000 barrels

The FSO Cawthorne has entered its commercial phase with the loading of its first shipment of 950,000 barrels of crude. This new quality, dubbed “Cawthorne Blend,” is described as a light, low-sulfur oil, comparable to Nigerian Bonny Light. The first shipment was destined for the Indian market.

The floating unit constitutes the first new crude oil export terminal put into service in Nigeria in about fifty years. It should facilitate the evacuation of production from OML 18 and neighboring assets while reducing dependence on land pipelines.

This dependence represented a major challenge for operators in the Niger Delta. The region’s pipelines are regularly affected by oil theft, vandalism, and operational interruptions. The use of a floating unit aims to secure part of the crude transport and limit the constraints related to barges and ship-to-ship transfers.

The project should also support the increase in production from OML 18. Sahara Group estimates that the block could reach a production of 45,000 to 50,000 barrels per day, compared to about 11,000 barrels per day indicated in the current asset presentation.

OML 18 covers an area of 1,035 square kilometers in the eastern part of the Niger Delta. The block includes several oil and gas fields, including Cawthorne Channel, Buguma Creek, Alakiri, and Krakama. Its commercial production dates back to 1970.

In 2015, Shell sold its 30% stake in the asset to Eroton Exploration and Production. TotalEnergies and Nigerian Agip Oil Company simultaneously sold their respective shares of 10% and 5%, bringing the total share transferred to the consortium of private operators to 45%. The overall transaction was valued at approximately $1.1 billion.

This divestment was part of the gradual withdrawal of major international companies from Nigeria’s onshore oil assets. Several majors have since refocused their investments on offshore projects, while Nigerian companies have taken over the operation of mature fields located in the Niger Delta.

The commissioning of the FSO Cawthorne thus marks a new milestone in the local management of these assets. It allows the partners of OML 18 to have a more direct export infrastructure, after several years marked by difficulties in production, transport, and securing facilities.