NDEP at 15 Years: Realising the Vision

On the 30 October 2010, Niger Delta Exploration & Production Plc (NDEP), Nigeria’s pioneering Independent petroleum

Exploration & Production Company, and its wholly owned subsidiary, Niger Delta Petroleum Resources (NDPR), celebrated the 5th

anniversary of uninterrupted Oil Production from the Ogbele Field.

The anniversary commemorates when Shell officially allowed oil to be pumped through the Rumuekpe Manifold Station into its

Bonny Terminal. This compliments another milestone achieved earlier in the year, the attainment of 5MM bbls of continuous oil

production.

The attainment of these two milestones are remarkable in their own right, but together they are testament to something

bigger – how far NDEP has progressed since its modest beginnings and how the Company’s fresh approach has resulted in many

innovative solutions and firsts:

  • First Nigerian indigenous company to obtain and operate a field Farmed-Out by the NNPC/Chevron Joint Venture;
  • First Small Oil Nigerian Field Development utilising Indigenous Capacity;
  • First to constitute a Host Community Development Trust;
  • First indigenous company to constitute a Gas Utilisation Project in compliance with the Federal Government’s zero gas

    flaring policy;

  • First to complete a pioneering Gas Purchase Agreement (GPA) with the NNPC/Shell JV
  • First to build refining capacity, with the installation of a 1000 bopd Diesel Topping Plant

This summary will chart NDEP’s journey, challenges and achievements and, how NDEP went on to realise the vision of its

late pioneering Chairman, Chief Aret Adams, to initiate a truly indigenous public oil company. The establishment of NDEP

allows Nigerians to access the Country’s most lucrative industry, the oil and gas sector, while using indigenous capacity and

boosting local content.

In the Beginning…

Late Chief Aret Adams, a former Group Managing Director of NNPC, helped to assemble a highly skilled team of

professionals, which resulted in NDEP, incorporated on the 25th of March 1992 as the Midas Drilling Fund, before being re-

named NDEP in November 1996. In line with the Company’s indigenous focus, NDEP sought to pioneer the development of marginal

fields, often overlooked by larger multinationals due to their size. To aid this, NDEP set up its operating Company, NDPR, a

wholly owned subsidiary company.

An appropriately sized and scoped marginal field was identified in OML 54, in the Ahoada East Local Government Area of

Rivers State, owned by the NNPC /Chevron Joint Venture. The formal and legal execution of the Farm-Out agreement was

achieved in 2000, making NDPR the first Nigerian indigenous company to obtain and operate a field Farmed-out by the

NNPC/Chevron JV.

It was then necessary to obtain adequate funding to exploit the Ogbele oil and gas field. In July 2001, an Initial Public

Offering (IPO) offered company shares to interested investors, which was followed by a bank loan facility, provided by

Intercontinental Bank Plc. This loan was the first of several received by the Company, from both national and international

financial institutions, which not only reflects the company’s sound business proposition, but also enabled NDEP to continue

with its many projects.

First Oil

NDEP proudly achieved First Oil production in August 2005, from Ogbele Well # 1. This achievement was the first time such

an event has occurred in the Nigerian Petroleum industry by a marginal operator and was warmly welcomed, especially by NDEP’s

shareholders, who patiently supported the Company’s growth.

The Company’s continued progress is also apparent when considering the Ogbele oil and gas field. To date, 5 wells have

been drilled, and a dedicated gas well is planned shortly, which has resulted in an average production rate of just over

4,500 bopd. NDPR has built a fully manned Flow Station, where crude is processed before being exported to Shell, through

pipelines at Rumuekpe.

NDEP, through its operating Company, is diversifying its assets to include gas development. A Gas Plant capable of

processing up to 100 mmscf/day, is nearing completion. This will allow the Company to meet the Federal Government’s flare out

policy, ahead of the 2012 deadline.

To facilitate this, NDPR, in June 2010, reached the effective conclusion of a pioneering Gas Sales Agreement (GSA) with

the NNPC/Shell JV. The Company’s industrious approach is also evident in the installation of a Topping Plant, a mini diesel

refinery, with a 1000 bopd capacity. This will eliminate dependency on external suppliers.

Community Outreach

The Host Communities Development Trust, established in 1997 by NDPR, was another first in Nigeria’s Petroleum industry.

The five communities, Otari, Ogbele, Obuneze, Oshuigboko and Rumuekpe all receive accruals from the Trust, to finance and

implement sustainable development projects within their communities.

The Trust, through a community participation approach, empowers host communities to be genuine partners in their own

development. To date, many community nominated projects have been completed which have improved the quality of life for

residents.

Minimal downtime and disruption has been recorded, in part due to the success of the Host Community Development Trust,

which helps to align the interests of the communities with that of the Company.

The Future

NDEP is set to build on its successes by expanding its capital and reserves base through identifying new opportunities. As

part of the Farm-Out Agreement with the NNPC/Chevron JV, NDPR has the right of first refusal to a second marginal field,

Omerelu, for which negotiations are currently being finalised. There are many other opportunities for growth which are

continually being reviewed by the Board, Management and Staff of NDEP. With its sound foundation, NDEP is poised for a great

future and by adhering to best practice, will leave a legacy for other operators to follow.

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