…considers increased investment on short term projects
Chevron has announced the extension of its Usan and Agbami oilfield leases in Nigeria to 2042.The company also increasing its investment emphasis on short-cycle projects, according to its 2022 Annual Report.
Chevron operates the Agbami oilfield, which is a subsea development. Agbami lies 113 km off the coast of the central Niger Delta region and spans 182 square km. The oilfield was discovered in 1998 and is at a water depth of approximately 4,800 feet. Chevron has a 67.3% interest in the field.
It explained that the extension of the leases until 2042 would provide Chevron with long-term access to these assets.
Besides, the company’s increased investment emphasis on short-cycle projects means that it may be shifting its focus towards projects that have shorter lead times and quicker returns on investment.
The company explained that the development could reflect a strategic shift towards more agile operations and a focus on profitability in the prevailing market environment.
The company added that the extension of deep-water licenses in Nigeria and the Republic of Congo contributed 36 million barrels to the company’s African asset base.
According to the report, about 27% of Chevron’s net oil-equivalent production in 2022 occurred in OPEC+ member countries like Nigeria, Angola, Equatorial Guinea, Kazakhstan, the Partitioned Zone between Saudi Arabia and Kuwait as well as the Republic of Congo.
Chevron disclosed that about $0.5 billion was expended on various offshore development and natural gas projects in Nigeria, Angola, and the Republic of Congo.
The company also stated that some changes in operating assumptions reduced estimated undeveloped reserves, and 31 million barrels of oil equivalent, BOE, in Nigeria due to lower expected offtake of natural gas relative to contracted volumes.
Chevron further noted that approximately 167 million BOE have remained undeveloped for five years or more, primarily due to facility constraints at various fields and infrastructure associated with the Escravos gas projects in Nigeria. A part of the annual report stated:
“Apart from acquisitions, the company’s ability to add proved reserves can be affected by events and circumstances that are outside the company’s control, such as delays in government permitting, partner approvals of development plans, changes in oil and gas prices, OPEC constraints, geopolitical uncertainties, and civil unrest. Supplemental Information on oil and gas producing activities”, it added.