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Nigeria Reviews Costs for Erha North, Egina Oil Projects

Nigeria, Africa’s top oil producer, said it’s evaluating the costs for Exxon Mobil Corp. (CVX)’s Erha North Phase 2 and Total SA (FP)’s Egina deepwater projects in order to “maximize” the government’s profits from the new projects.

The management of the state-owned Nigerian National Petroleum Corp. “is critically reviewing the overall economics of the projects in view of their high cost estimates in order to establish their validity, maximize Federal Government’s take and ensure comparative price competitiveness,” Fidel Pepple, an Abuja-based company spokesman, said today in an e-mailed statement.

Exxon Mobil’s Erha North project is planned to beginning production in 2015 with 50,000 barrels a day of crude output while Total’s Egina has a planned output of between 150,000 barrels and 200,000 barrels daily and will also start in 2015, according to information obtained from field operators and the U.S. Energy Information Administration.

Exxon Mobil, the second-largest producer in Nigeria, is the operator of a joint venture in which it holds a 40 percent stake, with state-owned NNPC holding the rest. Total also runs a similar joint venture in which it holds 40 percent equity and the state oil company holds the rest.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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