Olufemi Adeyemi

  • Signs contracts for three jack-up rigs as drilling begins in December
  • Targets 1.6bn barrels of oil in place, 1.9trn cubic feet of gas

West Africa Exploration and Production Company, WAEP, the upstream subsidiary of Dangote Group, has set a two-year target to achieve sustained production from its Nigerian oil assets, as it moves to revive the brownfield fields and unlock significant oil and gas reserves.

The company is seeking to recover value from Oil Mining Leases 71 and 72, which contain more than 1.6 billion barrels of oil in place, while simultaneously developing an estimated 1.9 trillion cubic feet of gas for the domestic market.

Managing Director and Chief Executive Officer of WAEP, Olajumoke Cecilia Ajayi, disclosed the production timeline at the AOW Energy Conference in Accra, Ghana, where she outlined the company’s strategy for transforming the assets into a commercially viable, long-term upstream business.

Speaking on a panel titled, “The Future of the African Operator: Building the IOCs of Tomorrow,” Ajayi said the company had adopted a phased approach that would prioritise the quick revival of existing production before embarking on broader field redevelopment.

Early production before full redevelopment

The strategy, she explained, is designed to generate early cash flow from the assets and use the proceeds to finance further development.

“We are prioritizing brownfield restart to get to first oil quickly,” she said, adding, “The idea is not to wait five years. We want to prove the concept, prove the cash flow, and then scale.”

WAEP acquired the assets as part of the wider divestment of Nigerian onshore and shallow-water oil fields by international oil companies, including Shell.

Rather than begin with an extensive, capital-intensive redevelopment programme, the company intends to first identify wells and production facilities that can be restored relatively quickly.

Ajayi said the immediate objective was to take advantage of what she described as the “low hanging fruit” within the portfolio.

“The first thing is to look at the low hanging fruit, the short term oil gains, generate cash flow from that, put it back into the assets and start redevelopment. And that’s exactly what is happening currently,” she said.

The approach is expected to provide WAEP with an early production base while giving the company time to undertake the more extensive technical work required to maximise recovery from the mature assets.

Three rigs secured for drilling campaign

The strategy has now moved into the execution stage, with WAEP signing contracts for three jack-up rigs for its planned drilling campaign.

Ajayi said drilling is expected to commence in December as the company seeks to increase output and unlock additional value from OML 71 and OML 72.

“We will be drilling to ramp up production and also bring out the value in the asset,” she said.

The drilling programme is being backed by six field development plan studies currently under way. According to Ajayi, the studies are expected to establish the technical and commercial basis for a succession of developments across the assets.

She described the planned programme as a series of “back to back developments,” suggesting that drilling and field development activity could continue beyond the initial campaign as individual opportunities are matured.

The combination of brownfield well restarts, new drilling and development planning is expected to create a longer-term production pipeline for WAEP.

Gas development to run alongside oil

While oil production remains the immediate focus, WAEP is also planning to develop the substantial gas resources associated with the two blocks.

The company estimates that the assets contain about 1.9 trillion cubic feet of gas, which it intends to monetise primarily for domestic power generation and industrial applications.

The parallel development of oil and gas could enable WAEP to build a broader portfolio while supporting Nigeria’s drive to increase domestic gas supply and reduce constraints affecting power and industrial users.

The company’s strategy also benefits from its connection to the Dangote Group’s downstream operations.

Refinery offers potential crude market

Ajayi pointed to the Dangote Petroleum Refinery and Petrochemicals as a potential domestic market for crude produced from the WAEP assets.

“One of the shareholders, one of the partners on this asset, is the owner of the largest refinery in Africa, Dangote Petroleum Refinery and Petrochemicals. So the oil would definitely be needed by the refinery,” she said.

The potential relationship could create a stronger connection between upstream production and domestic refining, allowing more Nigerian crude to be processed within the country rather than being exported for refining elsewhere.

Such integration could also provide WAEP with a potential anchor market as production from OML 71 and OML 72 increases.

Plans for dedicated crude evacuation terminal

WAEP is also working towards establishing a dedicated terminal to facilitate crude evacuation as production expands.

According to Ajayi, the proposed infrastructure could potentially serve WAEP's own operations while also providing services to other producers seeking to aggregate and evacuate crude.

Such an arrangement could create another commercial stream for the company while helping address one of the persistent challenges facing Nigerian producers: reliable and secure crude evacuation infrastructure.

For WAEP, the development of its own evacuation capacity is therefore part of a broader strategy that extends beyond simply restarting wells and increasing production.

Building an African independent operator

The discussion at the AOW Energy Conference focused broadly on the growing role of African-owned exploration and production companies and their ability to compete at scale following the increasing divestment of mature assets by international oil companies.

The panel, which also featured Olumide Ogunfowora, Adegbola Adesina, Temitope Edun and Uduakobong Equere, examined the technical, financial and institutional capabilities African operators need to develop if they are to assume a larger role in the continent’s upstream petroleum industry.

Ajayi, who is also President of the Nigerian Association of Petroleum Explorationists, NAPE, later moderated a separate session titled, “The Nigerian Upstream Opportunity: Unpacking Nigeria’s Basins.”

For WAEP, the challenge is not merely acquiring producing assets but developing the organisational capacity, technical expertise and financial discipline required to sustain and expand production.

Ajayi stressed that successful ownership of mature assets would depend heavily on having the right people and capabilities in place.

“We need to put round pegs in round holes. We need to put the right skill and competence in the different units,” she said.

She added that WAEP had been deliberate in strengthening its technical and organisational capabilities ahead of the next phase of development.

The company’s immediate two-year production target will therefore serve as an early test of its strategy: revive existing wells, generate cash flow, reinvest in the assets, execute new drilling and progressively move towards full-field redevelopment.

If successful, the programme could position WAEP as one of the emerging Nigerian independent operators seeking to convert divested oil and gas assets into sustained domestic production and long-term value creation.