LONDON (Alliance News) - Lekoil Ltd Wednesday said first oil from the Otakikpo Marginal field in Nigeria won't pour until the end of the third quarter after a "critical safety issue" was identified that interrupted development.
In June, Lekoil said it was expecting first oil from the field to "begin in the coming weeks" but said Wednesday this has been pushed back after a re-entry activities at the Otakikpo-002 well led to a critical safety issue being identified around the crown block of the rig which has forced temporary suspension of re-entry activities.
Lekoil will need tyo source replacement parts to fix the problem, and said it will consider sourcing those parts from outside of Nigeria, but said it will not contribute any funds for them as it is the responsibility of the drilling company.
"Phase 1 operation from Otakikpo is underway and we look forward to announcing first oil by end of the third quarter of 2015. Safety remains our key priority and we will continue applying the highest standard to our operations. The company would like to thank shareholders for their continued support," said Chief Executive Lekan Akinyanmi.
Lekoil holds a 40% interest in the field which was formally completed in June.
Otakikpo is sited in a coastal swamp location in oil mining lease 11, adjacent to the shoreline in the south-eastern part of the Niger Delta. OML 11 is held by the Shell Petroleum Development Co joint venture which includes the Nigerian National Petroleum Corp and units of Royal Dutch Shell PLC, France's Total SA and Nigerian Agip Oil Company Ltd. Otakikpo was awarded to Green Energy International Ltd by the Department of Petroleum Resources of Nigeria in 2011.
Lekoil paid Green Energy International a signature bonus of USD7 million when it signed the farm in deal in May last year, and a production bonus of GBP4 million is payable when certain production milestones are hit.
Lekoil shares were trading flat on Wednesday morning at 21.50 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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