EXPLORATION & PRODUCTION

About us >> Extract from CE's Report

UPSTREAM DIVISION
OANDO EXPLORATION AND PRODUCTION
Oando Upstream division presently comprises of Oando Exploration & Production Limited (OEPL) Oando Production Development Company (OPDC)

OEPL was created to tap into the vast natural petroleum resources of the Niger Delta and that offered by the Gulf of Guinea. This complements Oando’s Group vision of capturing margins across the entire energy value chain. Following inception, OEPL has increased our oil and gas prospect inventory base through the acquisition of OPL 278. OEPL is actively seeking growth through participation in bidding rounds and Farm- In Opportunities.

OPDC, the second upstream oil and gas business unit, has 45% interest in the Obodeti / Obodugwa field (OML 56 awarded in the 2003 Nigerian Marginal Field Round). OPDC is fast tracking the field development in 2007 to maximize returns to shareholders and increase the income streams into your company.

These two business units will manage the vision of capturing margins from the production of oil and gas assets. They will also focus on acquiring oil and gas assets with strategic value like gas to support our value creation across the company especially Gaslink and Oando Power.

The Upstream organization has been strengthened by the recruitment of key personnel skills to support this drive.

2006 In Review

• OML 56
Development of the Obodeti/ Obodugwa marginal field continued in 2006 (with partners Energia as Operator), despite community problems experienced in the area.

• OPL 278
Oando was awarded OPL 278 in the 2005 Nigerian Bid Round as Operator with 60% stake. A Production Sharing Contract (PSC) was signed and evaluation of initial seismic data for the block was completed in 2006. A full 3D seismic data acquisition is planned in 2007, whilst the exploration drilling program is expected to commence in 2008.

• OPL 282
Oando has 4% indirect interest in OPL 282, as part of the Local Content Vehicle (LCV) with Arc Oil and Gas under the Umbrella of Alliance Oil Producing Company Ltd. Nigerian Agip Oil Company is the Operator of OPL 282 with a 90% stake. In 2006, the Production Sharing Contract (PSC) for the block was signed and the exploration phase initiated, with plans to acquire full 3D seismic shortly.

• Other Oil and Gas Assets
OEPL actively sought the acquisition of a gas asset in 2006 to complement the value link with Gaslink. An acquisition of one such asset is at its closing stages and will significantly improve the gas development opportunity in the South Eastern Niger Delta.

Outlook for 2007

OEPL/OPDC will continue on the path to add significant value to the assets in Oando’s portfolio. Acquisition/interpretation of seismic data for OPL-278 and field development of the Obodeti/Obodugwa field will be paramount in 2007. Oando will also continue to look for avenues to spread risk by seeking credible partners. We will take advantage of opportunities to continuously increase our asset base by participating in bid rounds and Farms-ins with suitable partners and selecting properly evaluated assets.

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