WAEP Targets 1.6bn Barrels, Higher Output From Nigerian Assets

The West Africa Exploration and Production Company (WAEP), the Dangote Group’s upstream subsidiary, has unveiled a phased strategy to unlock more than 1.6 billion barrels of oil in place across its Nigerian assets and ramp up production over the next 24 months.

The company also plans to advance gas monetisation as it seeks to revive output from its brownfield assets, generate early cash flow and reinvest proceeds in wider field redevelopment.

Speaking at the AOW Energy Conference in Accra, Ghana, during a session titled:  “The Future of the African Operator: Building the IOCs of Tomorrow,” WAEP’s Managing Director and Chief Executive Officer, Olajumoke Cecilia Ajayi, said the company’s Oil Mining Leases (OMLs) 71 and 72, previously operated by Shell, represented a major resource opportunity.

She said the assets contain more than 1.6 billion barrels of oil in place and about 1.9 trillion cubic feet of gas, based on discoveries to date.

Ajayi, who is also President of the Nigerian Association of Petroleum Explorationists (NAPE), said WAEP’s immediate priority was to maximise existing production opportunities before embarking on broader redevelopment.

“The first thing is to look at the low-hanging fruit, the short-term oil gains, generate cash flow from that, put it back into the assets and start redevelopment. And that’s exactly what is happening currently,” she said.

The strategy has moved into the execution phase, with Ajayi disclosing that WAEP had signed contracts for three jack-up rigs, with drilling expected to commence in December.

“We will be drilling to ramp up production and also bring out the value in the asset,” she said.

She added that six field development plan studies were currently under way and would provide the basis for a series of “back-to-back developments” across the portfolio.

Ajayi also highlighted the potential for closer integration between WAEP’s upstream operations and domestic refining through its relationship with Dangote Petroleum Refinery and Petrochemicals.

“One of the shareholders, one of the partners on this asset, is the owner of the largest refinery in Africa, Dangote Petroleum Refinery and Petrochemicals. So the oil would definitely be needed by the refinery,” she said.

She said the arrangement could strengthen the link between Nigerian crude production and domestic refining, enabling more value to be retained within the country’s energy system.

WAEP is also working towards establishing a dedicated terminal to support crude evacuation as production increases. According to Ajayi, the proposed facility could potentially serve other producers seeking to aggregate and evacuate crude, creating an additional commercial opportunity around the company’s infrastructure.

Beyond the immediate production drive, Ajayi said WAEP was focused on building the technical and organisational capacity required to operate mature assets efficiently and sustain output.

“We need to put round pegs in round holes. We need to put the right skill and competence in the different units,” she said.

She said the company had been deliberate in strengthening its technical capabilities and organisational structure ahead of the next phase of development.

Within the next 24 months, Ajayi expects WAEP to have significantly increased production while putting gas monetisation infrastructure and arrangements in place.

“Between now and the next 24 months, gas monetisation would have been in place. We would have ramped up production consistently,” she said, stressing the need for “consistent, sustained production.”

The development comes as Nigeria seeks to reverse declining crude output, increase reserves and attract fresh investment into its upstream sector.

Analysts said sustained investment in existing assets, increased exploration and improved infrastructure would be critical to unlocking Nigeria’s production potential.

They also identified stronger protection of oil and gas infrastructure, improved security and continued regulatory reforms as necessary conditions for boosting production and increasing the sector’s contribution to economic growth.