Developing Marginal Fields In The Niger Delta: Recovery & Economics Can Be Better Than Currently Estimated

Abstract The main objective of the Marginal Fields Programme (MFP) initiated by the Federal Government is to enhance indigenous participation in the exploration and production of hydrocarbon in the Niger Delta. Under the MFP initiative, backed by the Petroleum (Amendment) Decree Act No. 23 of 1996, holders of Oil Mining License (OML) were required to farm-out fields that have remained unproduced for at least 10 years to indigenous Nigerian Exploration & Production (E&P) companies1. Majority, if not all, of these farmed-out fields are classified as marginal fields. A marginal field is defined as "a field that may not produce enough net income to make it worth developing at a given time; should technical or economic conditions change, such a field may become commercial"2. Thus the task facing the E&P companies that were given the farmed-out fields is how to make their development attractive economically i.e. produce enough net income. Changing the technical and/or economic conditions of these marginal fields is made challenging by virtue of the very limited technical data available. It is common knowledge that much attention has not been given to these fields in the past and is the main reason why they have remained unproduced. Leveraging on the large footprint of the Shell Petroleum Development Company (SPDC) across the Niger Delta and making use of her PVT database for sampled, analysed and/or producing fields, the Niger Delta region was sub-divided into geological units based on similarity in observed PVT parameters. With the work done and presented in this paper, knowing the geological location of any marginal field in the Niger Delta is enough to fairly estimate its basic PVT properties. The paper goes further to show, using a case study through a dynamic simulation model built for a marginal field, that previous PVT estimations, recoveries and development economics for the case study marginal field were pessimistic. Extending the results of the case study it is the position of this paper that some other marginal fields in the Niger Delta will benefit from a PVT, recovery and development economics review. Their development can produce enough net income.