Exploring the Benefits of Collaboration in the Nigerian Upstream Oil and Gas Sector

December 1, 2023

Nigerian Upstream Oil and Gas (Photo: )

Collaboration plays a crucial role in the upstream oil and gas industry, offering a range of benefits that contribute to operational efficiency, innovation, risk mitigation, and sustainable growth.

Newcross Petroleum Limited, an indigenous oil and gas company in Nigeria, has solidified its gains in the oil and gas industry through joint venture partnerships and collaborations with various upstream companies and government institutions.

Using Newcross Petroleum Limited as a case study, some of the benefits that can be derived from collaboration in the Nigerian upstream oil and gas include:

  • Shared expertise and resources: collaboration allows companies to pool their collective knowledge, skills, and resources. In 2007, Newcross Petroleum acquired a 40% participating interest in Egbaoma Marginal field (OML 38) operated by Platform Petroleum Limited, one of Nigeria’s leading indigenous oil and gas companies. Following the collaboration with Platform Petroleum Limited, the Egbaoma Marginal Field recorded over one million person-hours with no Lost Time Injuries (LTI). This partnership improved technical and operational success at the Egbaoma Marginal Field.
  • Technology Advancement: collaboration in the upstream oil and gas industry encourages the sharing of technological innovations and best practices, essentially leading to optimised crude oil exploration. The Ase River Transport Limited (ARTL), located in the north-central part of the Niger Delta Basin, is a joint venture between Newcross Petroleum Limited and Platform Petroleum Limited. The midstream operator, Ase River Transport Limited, is responsible for transporting produced crude oil for the Egbaoma operations and other cluster members. Through the partnership, both companies achieved a valve placement at the upstream and downstream of the Ase river crossings aimed at controlling and preventing possible oil spillage.
  • Regulatory Compliance: Industry regulations and environmental standards are becoming increasingly stringent in the Nigerian oil and gas industry. Collaborating on compliance strategies ensures that companies collectively meet regulatory requirements and maintain a positive reputation. Newcross Petroleum Limited operates OML 152 under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Company Limited. The collaboration enabled Newcross to fulfil all regulatory commitments for converting the asset from an OPL phase to an OML phase. Since the collaboration, eight (8) prospects have been identified within the block.
  • Local Community Engagement: collaborative projects can improve stakeholder and community relationships. The mutual efforts of both companies can be directed at addressing community concerns and promoting significant resource development. The NNPCL/Newcross EP Joint Venture, in the year 2020, commissioned its first legacy project at Idama, Port-Harcourt. The construction of the block of 4 units of self-contained guest houses in the Idama community, Port-Harcourt, Rivers State, fostered the harmonious relationship existing between NNPCL/Newcross EP JV and the Idama community. The joint venture enabled Newcross EP to deliver the project promptly and encouraged peaceful coexistence among the host community.

Overall, collaboration is one of the powerful tools that enable upstream oil and gas companies to overcome challenges, utilise opportunities, and create a more robust and sustainable industry ecosystem.