Can you introduce NewcrossEP and the OML 24 to our audience?

NewcrossEP is a wholly indigenous-owned entity, established in 2013 specifically for the acquisition of OML 24. We emerged as the successful bidder for this asset in 2014. 

OML 24 is a prolific, producing asset with significant oil and gas reserves. Located in the Eastern Niger Delta, Rivers State, it covers approximately 162 km2 of onshore terrain. The asset comprises three producing fields (Ekulama, Awoba Main, and Awoba North West), and boasts three flow stations with a production capacity of 130,000 bpd and 80 MMSCFD of gas processing.

What have been the main challenges for NewcrossEP as the operator of OML 24?

Our main challenge has been security, particularly regarding our pipeline network's integrity. We encountered issues with pipeline evacuation and experienced significant losses around 2022, reaching 100% at one point. To mitigate security risks, we have implemented alternative evacuation systems. Additionally, vandalism in the area poses environmental concerns, prompting us to focus on cleanup and restoration efforts. Furthermore, multiple taxation and overregulation burden our operations. These challenges, compounded by difficulties in securing funding, hinder our ability to run OML 24. Despite these obstacles, we remain committed to our mission of delivering sustainable energy solutions.

How has the Host Community Development Trust Fund initiative alleviated security challenges for operators in the Delta?

The fund empowers host communities, enabling them to develop their environment with allocated resources. Due to the remote nature of many communities, emphasis has been placed on providing them with electrification and infrastructure. This shift redistributes some costs but ultimately enhances community involvement and development. We actively participate as signatories to ensure transparency and proper utilization of the fund, aligning with our commitment to stakeholders and sustainable business practices. The Host Community Development Trust Fund safeguards the interests of the settlors (the operating entities) by incorporating measures to ensure the safety of assets and delineating responsibility for any potential impact on operation resulting from community interference.

How has NewcrossEP navigated the current currency crisis?

Since our arrival, we have witnessed significant changes in the value of the naira against the dollar. These fluctuations deeply influence our operations, especially in terms of budgeting and financial planning. Luckily, we anticipated these changes last year and were able to prepare ourselves to weather this challenge. 

Moreover, political factors also significantly impact our operations. We closely monitor political developments as they can trigger changes in economic policies that directly affect our business environment. Being proactive and prepared for such changes is paramount to mitigating potential disruptions. Overall, while the currency crisis and political factors pose challenges, they also present opportunities for us to adapt and innovate. By maintaining a strategic approach and closely monitoring the macroeconomic landscape, we can navigate these challenges while capitalizing on opportunities for growth and sustainability.

Can you discuss the potential opportunities in the gas sector and elaborate on any initiatives NewcrossEP is undertaking in this realm?

Currently, we operate a gas plant in our Awoba field location. This facility handles various gas processing activities. In alignment with Nigeria's ‘Decade of Gas’ vision we are actively engaged in initiatives like carbon capture. Our collaboration with experts is instrumental in this regard as it provides us the opportunity to monetize every molecule of gas we produce while ensuring minimal environmental impact. We are committed to achieving zero gas flaring ahead of the 2030 government deadline. 

Can you outline NewcrossEP’s priorities for the coming years?

Our primary focus is on operational safety and efficiency. We are dedicated to stabilizing our evacuation strategy while simultaneously increasing production. Cost control is essential, particularly concerning alternative evacuation methods which are more costly than traditional pipelines. Our goal is to bring down our unit OPEX while expanding production capacity.

Another key area is energy transition, with a focus on gas. We have developed a comprehensive gas master plan to maximize resource monetization, including initiatives like carbon capture for environmental sustainability. 

Mitigating risks remains crucial. We have implemented a robust risk management framework to address macro and micro-level risks effectively. By safeguarding stakeholder interests, we aim for sustainable growth and corporate responsibility alignment. Overall, our objective is to conduct oil and gas operations sustainably, benefiting all stakeholders involved.