It is official: Lagos state has finally become an oil-producing state, and will join states who get 13 percent derivation from the federation account.
PUNCH reports that Yinka Folawiyo Petroleum Company Limited (YFP), a wholly-owned indigenous firm and operator of the OML 113 offshore Lagos, on Tuesday announced the commencement of production of crude oil from the field.
This is coming 25 years after the company was awarded an oil prospecting licence.
Tunde Folawiyo, YFP chairman, was quoted to have said: “The attainment of this milestone is indeed a laudable achievement not just for the YFP, but for the Nigerian oil and gas industry as a whole and indeed Lagos State, which can now be addressed as an oil-producing state.
“We are very proud of and appreciate the efforts, determination and commitment of the entire Aje project team, past and present; the constant support from our regulators, the DPR and Ministry of Petroleum; and our financiers. We believe this crucial support will spur us on to even greater achievements.”
YFP partnered New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited, Pan Petroleum (Panoro Energy) Aje Limited and PR Oil & Gas Nigeria Limited in the exploration.
Panoro had in an update posted on its website on April 20 said the final hook-up procedures were in progress with a view to bringing the wells into production shortly.
Oil produced from the Aje field will be stored on the Front Puffin, which has production capacity of 40,000 barrels of oil per day and storage capacity of 750,000 barrels, according to the YFP.
YFP was awarded the oil prospecting license (OPL 309) in June 1991 as a sole risk contract under the Nigerian government’s indigenous allocation programme, which was put in place to encourage the development of a locally owned and operated Nigerian upstream oil industry.
The total area covered by the concession block is 1699 sq km, YFP said on its website.
Following the acquisition of 2D seismic data in 1994/95, and the drilling of the Aje-1 well in 1996, the Aje field was discovered.
A second well, Aje-2, was drilled the following year in 1997. After the successful drilling and testing of both wells, OPL 309 was converted to oil mining license (OML) 113 in 1998 with an initial term of 20 years.
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