Canada’s Africa Oil Corporation is set to significantly expand its footprint in Nigeria by doubling its production to about 35,000 barrels per day after the completion of its deal for full ownership of Prime Oil & Gas Cooperative next Tuesday.
According to report, a senior company official, Africa Oil will take full control of Prime Oil, a Dutch entity that holds indirect stakes in deep-water Nigerian fields operated by TotalEnergies and Chevron
“On closing of that deal, we will significantly change the scale of our business. We will double production, we double reserves and significantly boost our liquidity position,” Africa Oil’s chief commercial officer, Oliver Quinn said.
Following the completion of the deal, Africa Oil anticipates increasing its production to approximately 35,000 barrels per day. “These barrels hold significant value due to their low lifting costs, which are below $10, resulting in high margins and typically commanding a premium over Brent,” he stated. Quinn further mentioned that to sustain production in its mid-life fields, Africa Oil and its partners have scheduled an infill drilling campaign for this year. In addition to its operations in Nigeria, Africa Oil has interests in Equatorial Guinea and a substantial stake in Namibia’s Orange Basin. The company, through its 40% ownership in Impact Oil and Gas, is positioned to benefit from the recent oil discovery. TotalEnergies, the operator of the Venus discovery, is anticipated to reach a final investment decision by 2026, which could enable Namibia to become an oil exporter by the end of the decade.
Our primary objective is to enhance our cash generation capabilities, which will continue to thrive throughout the decade. As Namibia Venus comes onstream, we anticipate substantial growth from this asset, Quinn stated. This strategic expansion by Africa Oil not only solidifies its foothold in Africa’s oil industry but also positions the company for long-term benefits from Namibia’s burgeoning petroleum sector. Moreover, this growth initiative will play a vital role in boosting Nigeria’s crude oil production, a goal that the federal government is committed to achieving. Recent reports indicate that Nigeria has exceeded its OPEC quota of 1.5 million barrels per day by 70,000 barrels. However, it still falls short of its ambitious target of 2.06 million barrels per day.
Africa Oil Corp. received a significant boost last year when the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) granted a 20-year extension for its Petroleum Mining Lease 52 (PML 52). This lease encompasses a substantial 62.46% stake in the lucrative offshore Agbami field. In addition to PML 52, the company is actively involved in other operations across Nigeria, including PML 2, PML 3, and PML 4, all of which are managed by industry leaders Chevron and TotalEnergies. As highlighted on the company’s website, these fields are known for producing light to medium sweet crude oil, which is efficiently extracted through advanced Floating Production, Storage, and Offloading (FPSO) systems.
