Malaysian contractor Yinson has struck a provisional deal to provide a floating production, storage and offloading vessel off Nigeria for Lagos-based independent First E&P, writes Iain Esau.

The FPSO would exploit the First E&P-operated Anyala and Madu discoveries in Oil Mining Leases 83 and 85, where state-owned Nigerian National Petroleum Corporation (NNPC) is a partner.

The next steps for Yinson and First E&P are to negotiate a bareboat charter and an operations and maintenance agreement, with the aim of finalising these deals by the end of this month.

According to a statement filed with Kuala Lumpur’s stock exchange, Yinson said the charter period would run for a minimum of seven years, with options to extend the agreement for up to eight additional years.

The FPSO, installed on Anyala, is expected to handle about 50,000 barrels per day of oil and 120 million cubic feet per day of gas.

First oil is expected in early 2019 but could slip to later that year.

Lagos-based Ariosh carried out front-end engineering and design work on the phased project, and completed its work earlier this year.

Phase one includes two wellhead platforms and a 22 kilometre, 10-inch flowline that will route Madu’s production to the FPSO, where oil will be separated and gas-reinjected into Madu.

Another two wellhead platforms could be needed to bring the development well count up to 20.

The project was approved a year ago, with an initial budget of about $700 million.

Working with Schlumberger, the partners aim to exploit 193 million barrels of oil and 800 billion cubic feet of gas resources.

The Anyala discovery is located in OML 83 and has estimated in-place resources of 218 million barrels of oil and 175 Bcf of gas and is the core asset in this project.

Madu, in OML 85, holds some 89 million barrels of oil and 739 Bcf of gas.

Last July, First E&P’s managing director Ademola Adeyemi-Bero said that Schlumberger’s involvement would “infuse a novel asset development model to strengthen project delivery capability while offering a credible alternative funding and technical partnership model for growing production and adding reserves”.

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Nigeria deal for Yinson