North-east oil explorer Eland Oil and Gas said yesterday it would take longer than it expected to restore production from an asset in Nigeria.
Westhill-based Eland said it had made “good initial progress” on the OML 40 onshore development, but added: “It would seem likely that completion of the necessary work will extend beyond the original quarter one target.”
The project to resume production from two wells that were shut in seven years ago involves the laying of several miles of replacement flowlines, the repair of an export pipe and the re-certification of existing facilities. Eland bought a stake in the Niger Delta asset, alongside joint-venture partner Starcrest, in September.
The £97million deal led to the two partners forming Elcrest, which has a 45% share in the licence following an auction by Shell, Total and Agip. The remaining stake is held by Nigerian state oil company NPDC.
“Our strategy remains focused on developing OML 40, with its world-class reserves, and to continue in our efforts to build a portfolio of exploration and development assets in Nigeria,” Eland chief executive Les Blair said yesterday. He added: “This will deliver a growing production cashflow and we are very excited by what lies ahead.”
Eland also said it had entered into an option agreement with Amalgamated Oil Company Nigeria for the exclusive right to buy a 40% stake in exploration licence OPL 452, in the eastern Niger Delta.