Exploration and Production
In 2008, total daily production in Nigeria averaged 376,000 barrels of crude oil, 181 million cubic feet of natural gas and 16,000 barrels of liquefied petroleum gas (LPG). Chevron's net oil-equivalent production was 154,000 barrels per day.
Through our principal subsidiary in Nigeria, Chevron Nigeria Ltd. (CNL), we operate and hold a 40 percent interest in 13 concessions covering 2.2 million acres (8,900 sq km). These concessions are operated under a joint-venture arrangement with the Nigerian National Petroleum Corporation (NNPC), which owns a 60 percent interest.
Onshore and Near Offshore
Chevron has a 40 percent operated interest in the South Offshore Water Injection Project, which is an enhanced crude-oil recovery project. The objectives of this project are to boost production through water injection and increased efficiency in the Okan and Delta fields. Total crude-oil production in 2008 averaged 15,000 barrels per day (5,000 net).
In 2003, Chevron's swamp production was closed down following community unrest and vandalism of the facilities. By the end of 2008, full production had been restored to all seven swamp fields at an average daily rate of 77,000 barrels of crude oil (25,000 net). Additional facility repair and replacement projects are planned in order to increase capacity in the fields. In early 2008, work began on the replacement of the aging 26-inch (66-cm) trunk line that brings the swamp's crude oil production from Abiteye to Escravos. The trunk line is being replaced with a 16-inch (40-cm) pipeline. Project completion is expected in 2010.
Deep Water
At the end of 2008, Chevron had interests – ranging from 18 to 100 percent – in 12 deepwater blocks in offshore Nigeria. The company operates four of these blocks.
The Agbami Field lies 70 miles (113 km) off the coast of the central Niger Delta region, spanning 45,000 acres (182 sq km). Discovered in 1998, the Agbami Field is at a water depth of approximately 4,800 feet (1,463 m). Chevron holds a 68.2 percent interest in and operates this project.
Agbami is a subsea development with wells tied back to a floating production, storage and offloading vessel. Agbami achieved first oil in May 2008, and by early 2009, total crude oil production averaged 170,000 barrels per day (116,000 net). Development drilling and completion operations are planned, with maximum total liquids production of 250,000 barrels per day anticipated by year-end 2009.
The total cost for Stage 1 of this project is estimated at $7 billion. Subsequent stages to drill up to 16 additional wells are being planned. The final investment decision for Stage 2 of this project, involving 10 of these new wells, is scheduled for the second half of 2009.
Chevron also has a 30 percent nonoperated interest in the Usan Project located in 2,461 feet (750 m) of water, 62 miles (100 km) off the coast in the eastern Niger Delta region. All major construction contracts were awarded in early 2008. Development exploratory drilling was scheduled to start in the first half of 2009. Production startup is projected for late 2012. Maximum total production of 180,000 barrels of crude oil per day is expected to be achieved within one year of startup.
The Aparo Field and the Bonga SW Field share a common geologic structure and are planned to be developed jointly. The geologic structure lies 70 miles (113 km) offshore in 4,300 feet (1,311 m) of water off the coast of the western Niger Delta region. Chevron will have an approximate 20 percent nonoperated working interest in the proposed area. The project was delayed in 2008 so that stakeholders could agree on the project's scope. Partners signed a preliminary agreement in January 2009. The final investment decision depends on another agreement.
Chevron operates and holds a 95 percent interest in the Nsiko discovery, which lies in approximately 5,800 feet (1,768 m) of water, 90 miles (145 km) off the coast of the western Niger Delta region. Subsurface evaluations and field development planning were completed in 2008, and a local content agreement was signed. Development activities are planned to continue and front-end engineering and design is expected after commercial terms are finalized.
In the Nigeria–São Tomé e Príncipe Joint Development Zone (JDZ), Chevron holds 45.9 percent interest in and operates JDZ Block 1. In 2008, technical studies concluded that the discovery was uneconomic. Identification and analysis of other prospects within the JDZ continued in early 2009.
Natural Gas
Construction continued during 2008 on the Chevron-operated and 40 percent-owned Escravos Gas Plant (EGP) Phase 3A expansion in Escravos. Start of beneficial operations is expected in 2010. The project includes infrastructure for offshore natural-gas gathering and compression and a second natural-gas processing facility. The project is designed to increase daily processing capacity from 285 million to 680 million cubic feet of natural gas and increase daily LPG and condensate capacity from 15,000 to 58,000 barrels. Total capital costs for the project are estimated at $2.8 billion, which includes future drilling to keep the plant at capacity.
The Escravos Gas Project Phase 3B is also 40 percent-owned by Chevron. With startup expected in 2013, the project is a continuation of the company's Western Delta Gas Development Program, the aim of which is to eliminate routine flaring of natural gas that is associated with the production of crude oil. The project includes installation of a 120 million-cubic-foot-per-day natural-gas-gathering and compression platform near the existing Meren 1 complex, installation of approximately 75 miles (121 km) of subsea pipelines, and modifications to nine existing production platforms. Total capital costs for the project are estimated at $2 billion.
Chevron and the NNPC are developing a 34,000-barrel-per-day gas-to-liquids facility at Escravos that is designed to process 320 million cubic feet per day of natural gas from the EGP Phase 3A project. Engineering procurement was essentially complete at the end of 2008 and facility construction was under way. The biggest milestone achieved in 2008 was the shipping and installation of two gas-to-liquids reactors. The remaining process modules were scheduled to be shipped and positioned on site in 2009. CNL has a 75 percent interest in and will operate the $6 billion plant, which is planned to start up in 2012.
Chevron has a 19.5 percent interest in the Olokola Liquefied Natural Gas Free Zone Enterprise (OKLNG) that will operate the Olokola LNG project. OKLNG plans to build a multitrain natural-gas liquefaction facility and marine terminal located northwest of Escravos. The project began front-end engineering and design in 2006 and is expected to be implemented in phases, starting with two trains having 12.6 million metric tons of total capacity.
Chevron operates and holds a 40 percent interest in six oil fields collectively referred to as the Onshore Area. In 2003, civil unrest in the area resulted in vandalism of existing compression infrastructure. The Onshore Asset Gas Management project is designed to restore these facilities and to supply 125 million cubic feet of natural gas to the Nigerian domestic gas market. As of early 2009, early construction work had begun, with the main construction contract expected to be awarded in 2010.
Chevron is the largest shareholder in West African Gas Pipeline Company Limited, with a 36.7 percent interest. The company constructed, owns and operates the 421-mile (678-km) West African Gas Pipeline that is designed to supply Nigerian natural gas to customers in Ghana, Benin and Togo for power generation and industrial applications. First gas was shipped in December 2008. Compression facilities to increase capacity to 170 million cubic feet of natural gas per day are targeted for completion in 2010.
Marketing and Retail
In March 2009, Chevron announced the sale of our fuel marketing businesses in Nigeria.
Updated May 2009