Insight
Valuing ExxonMobil's Owowo discovery in deepwater Nigeria
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
In October 2016, ExxonMobil announced that its Owowo deepwater discovery could hold 500 million to 1 billion barrels of recoverable resource. Owowo is located near to the producing Usan field which is also operated by ExxonMobil. A tie-back to the Usan FPSO could allow early production, with a leased FPSO a possibility for a later phase. The fiscal terms are similar to the 2005 PSC, the toughest of the deepwater era, while Nigeria's high costs are supported by local content. Does Owowo work with these disadvantages? Our Global Economic Model (GEM) shows that it needs to be at the upper end of the reserves scale to deliver attractive returns. However, every 1% of cost savings could realise 1.6% of extra value, so there is a clear incentive to reduce costs. Report includes production, capital cost and operating cost profiles and cash flows. Metrics such as IRR, Breakeven Brent price and Government take are also provided.
Table of contents
- Introduction
- A straddling field, but with partner and fiscal alignment
- Timing and costs
- Development scenarios
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Economic analysis
- Incremental valuation of project phases
- Capital cost sensitivities
- Economic assumptions
Tables and charts
This report includes the following images and tables:
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Owowo discovery and surrounding acreageParticipation in Owowo and Usan acreage (%)Summary economics for full-field Owowo development (high & low case reserves)
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Production, cost & cash flow profiles (500 mmbbls)Production, cost & cash flow profiles (1 bn bbls leased FPSO)Summary economics: Phase 1 (high & low case)Summary economics: Phase 2 (high & low case)Valuing ExxonMobil's Owowo discovery in deepwater Nigeria: Table 2
What's included
This report contains:
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