Natural Gas
Nigeria’s natural gas reserves are estimated by the Nigerian National Petroleum Corporation (NNPC) to be 187 Tcf in 2006, ranking Nigeria to be the seventh largest natural gas reserves holder in the world. To date this resource has been underdeveloped largely due to a lack of readily accessible markets. The Nigerian government has announced its objective to increase natural gas revenue sales match oil revenues by 2010. To achieve that goal, the Nigerian government has announced what is commonly referred as the “Flares Down by 2008” policy which intends to encourage oil companies to develop natural gas projects in order to eliminate the routine flaring of associated natural gas by 2008.
Responding to Nigeria's "flares down by 2008" directive, Addax Petroleum initiated programs in each of its oil PSC's in Nigeria, - production properties in Nigeria, - OML 123, OML 124 and OML 126 (former OPL 90):
- to determine if these policies presented the company with a viable new growth opportunity and new revenue source at each property
- to ensure that the company’s operations at each property would be in a position to comply with the flares down policy
- to determine at each property how to best link compliance with the flares down policy with the potential monetisation of the natural gas resource.
At OML 124 the company created a project team to conduct a feasibility study on a possible investment in a LPG plant at Izombe. Discussions with a potential Nigerian partner are ongoing.
At OML 123 and OML 126 (former OPL 90) monetisation plans were developed as part of the flares down compliance strategy. Project teams at both sites have identified possible ways in which the company could under certain conditions successfully commercialize the gas resources. Discussions with authorities, potential partners and customers are on going.