Strategic Partnerships in Domestic Gas Project Maturation: The Iseni Phase 1 (OML35) Case

Abstract The gas rich Iseni field is part of the Okpokunou Cluster (OML 35) located in Sagbama Local Government Area (LGA) of Bayelsa State that was discovered in the 1970's by four exploration wells. The cluster has the potential to deliver significant gas volumes to the Nigerian domestic gas market but to date has been undeveloped due to its remote location and lack of facilities in the area. In 2015, SPDC partnered with a reputable indigenous company (BlueStar Gas Limited (BGL) and executed a gas sales agreement for the development of the field. This partnership is poised to support Nigeria's growing demand for domestic gas especially in the Western part of the Niger Delta area of the country. This paper will discuss the project from three perspectives: The Subsurface reservoir description and uncertainties - The field was discovered in 1973 by the Iseni 1 exploration well. Two further wells and one side-track were drilled between 1973 and 1987. The wells penetrated thirteen stacked, gas-baring intervals with excellent reservoir sand properties. Five of the thirteen reservoirs are considered ‘ready to go’ for development due to the greater certainty around their gas content.The Project maturation methodology - The project development is split into the upstream and midstream scopes which will be matured by SPDC and Bluestar Gas Limited respectively. Apart from the appraisal-development wells, the upstream scope involved the construction of well head facilities, flowlines, a manifold and other civil works. The aim of the upstream scope is to safely deliver the wells and facilities to enable tie-in of the pipelines and flow lines to flow 100MMScf/d of unprocessed gas. The midstream scope is defined by the construction of a 47km pipeline from the wellhead to a third-party gas processing facility at Utorogu for use at the Dangote Fertilizer Plant at Lekki, Lagos State.Lastly, the paper discusses considerations around the risks, uncertainties and mitigation plans in place describing the areas of interface and how the two companies have partnered together to develop an integrated roadmap to the credible delivery of the project. The OML35 journey to Final Investment Decision demonstrates how a strategic partnership hinged on technical excellence, commerciality, and trust, yields tangible benefits that actualize the Nigerian Domestic Gas aspiration.