On June 21, the company said that its subsidiary, Total Upstream Nigeria Limited, and partners received the necessary approvals from Nigerian National Petroleum Corporation to begin developing the field, which was discovered a decade ago and is located about 125 miles offshore Port Harcourt and roughly 15 miles southwest of the Akpo field, in water depths of around 5,250 feet.
Total's president of upstream, Yves-Louis Darricarrère, said of the development:
Egina is the second development of the OML 130 license. Following Akpo, which was brought on stream in 2009, it will add significant value to the partnership. With more than 21 million man-hours of local work, the project will make a material contribution to the development of Nigerian economy. After more than 50 years in the country, we are confident that Nigeria will continue to provide a suitable framework to promote investments.
The project's development plan calls for 44 wells connected to a 330-meter-long floating production, storage, and offloading vessel that can store 2.3 million barrels. According to a statement by the company, first oil from Egina is expected at the end of 2017 and oil production is expected to reach 200,000 barrels per day. The project is expected to cost about $15 billion to develop.
Total is the project's operator and commands a 24% stake. Other stakeholders include Nigerian National Petroleum Corporation, South Atlantic Petroleum of Nigeria, China's CNOOC (NYSE:CEO), and Petroleo Brasilero SA.
Total and others shift Nigeria operations offshore
Total has been operating in Nigeria for more than 50 years, with its production in the country last year coming in at 279,000 barrels of oil equivalent per day. But as its recent move highlights, the French oil major is refocusing its efforts in Nigeria toward deepwater projects, which it views as one of its main sources of growth in the country.
In addition to Egina, Total operates the Akpo field in OML 130 and also maintains interests in OMLs 99, 100, and 102 through a joint venture with the state-owned Nigerian National Petroleum Corporation. Other international energy companies operating in Nigeria have also decided to refocus their efforts toward deepwater prospects, which are less susceptible to the theft and vandalism that have plagued countless projects in the interior of the country.
For instance, Chevron (NYSE:CVX) said earlier this month that it would sell some of its oil blocks in Nigeria's shallow waters, while Shell (NYSE:RDS-A) announced last week that it is contemplating reducing its production in the sabotage-prone eastern Niger Delta, while at the same time planning to boost investment in offshore gas and pipeline projects.
Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Chevron and Total SA. (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.