Contractors on Nigeria’s offshore Aje field have cut costs by 37.5%, with breakeven price reduced to $28 per barrel.
The partners have cut operational and maintenance costs on the field 35% and lease costs for the FPSO by 40%.
ADM Energy said the partners were storing crude on the floating production, storage and offloading (FPSO) vessel until prices recover. A lifting took place in March.
The FPSO can hold 755,808 barrels and production was 2,328 barrels per day in the first quarter of the year.
ADM expects prices to recover in the third or fourth quarter of this year.
Yinka Folawiyo Petroleum (YFP) is the operator of the Aje field, in OML 113, near the maritime border with Benin. The Aje-4 well is producing from the Cenomanian reservoir and the Aje-5 from the Turonian.
There have been discussions about the next phase of work on the field. The partners have planned to drill three wells in 2021. In the longer term, the FPSO will be exchanged for a vessel that can handle gas on the field.
“We are pleased to report that operations at OML 113 have been largely uninterrupted by COVID-19, which is a consequence of the safety procedures in place to protect workers,” said ADM’s CEO Osamede Okhomina.
“To steer ADM through the current low oil price environment, we have taken appropriate measures with a significant cost reduction plan, both at a corporate level and on the asset side, to streamline our operations while maintaining production levels.”
The company set out plans to cut G&A costs by 35% in late April. ADM has enough cash to maintain operations until the end of the year.
PetroNor E&P struck a deal with YFP in October 2019 forming a joint company, Aje Petroleum, which is to oversee development on the field. The companies are waiting for approval from the Department of Petroleum Resources (DPR).
Century Engineering Services owns the Front Puffin FPSO, on the Aje field, and also handles the O&M work.