TNOS Classification: Statoil internal Status: Draft Review of NnwaDoro (OML 109) screening work to NAPIMS by Statoil March 2004.

TNOS

Classification: Statoil internal Status: Draft

Review of NnwaDoro (OML 109) screening work to

NAPIMS by Statoil

March 2004

TNOS

2

License Map

309

312

310 311

313 316315314

AGIP

209 210

211

213

219

217 218

216

221220

222

223

LAGOS

BENIN CITY

WARRI

PORT HARCOURT

3 Eo 4 Eo 8 Eo

4 No

5 No

6 N

o

1000 m

200 m

212

2000 m

242

243 244246

247

o

245

248

249

250

6 Eo

3 No

317 318

319 320

322321

323 324

325 326

251

252

253

264

254 255 256 257 258

259260261263 262

328

330

331

327

329

0 100 KM

3000 m

4000 m7 E5 Eo

214 215

NnwaNnwa--1&21&2 DoroDoro--1X1X

OPL218 & OPL219

309

312

310 311

313 316315314

AGIP

209 210

211

213

219

217 218

216

221220

222

223

LAGOS

BENIN CITY

WARRI

PORT HARCOURT

3 Eo 4 Eo 8 Eo

4 No

5 No

6 N

o

1000 m

200 m

212

2000 m

242

243 244246

247

o

245

248

249

250

6 Eo

3 No

317 318

319 320

322321

323 324

325 326

251

252

253

264

254 255 256 257 258

259260261263 262

328

330

331

327

329

0 100 KM

3000 m

4000 m7 E5 Eo

214 215

NnwaNnwa--1&21&2 DoroDoro--1X1X

OPL218 & OPL219

309

312

310 311

313 316315314

AGIP

209 210

211

213

219

217 218

216

221220

222

223

LAGOS

BENIN CITY

WARRI

PORT HARCOURT

3 Eo 4 Eo 8 Eo

4 No

5 No

6 N

o

1000 m

200 m

212

2000 m

242

243 244246

247

o

245

248

249

250

6 Eo

3 No

317 318

319 320

322321

323 324

325 326

251

252

253

264

254 255 256 257 258

259260261263 262

328

330

331

327

329

0 100 KM

3000 m

4000 m7 E5 Eo

214 215

NnwaNnwa--1&21&2 DoroDoro--1X1X

OPL218 & OPL219

309

312

310 311

313 316315314

AGIP

209 210

211

213

219

217 218

216

221220

222

223

LAGOS

BENIN CITY

WARRI

PORT HARCOURT

3 Eo 4 Eo 8 Eo

4 No

5 No

6 N

o

1000 m

200 m

212

2000 m

242

243 244246

247

o

245

248

249

250

6 Eo

3 No

317 318

319 320

322321

323 324

325 326

251

252

253

264

254 255 256 257 258

259260261263 262

328

330

331

327

329

0 100 KM

3000 m

4000 m7 E5 Eo

214 215

NnwaNnwa--1&21&2 DoroDoro--1X1X

OPL218 & OPL219

TNOS

3

OPL 217OPL 216 OPL 218 OPL 219

OPL 246

OPL 220

AGBAMI

BOLIA/CHOTA

NGOLO

NNWADORO

BILAH

Gas: 6

AKPO

NnwaDoro - The key to monetise gas and unlock oil for Nigeria’s southern deepwater area

SOUTHERN RIM JDZ

Gas:10 – 15 tcfOil:1-2 bn bbls

Gas: 5 – 10 tcf ?Oil: 2 –5 bn bbls ?

TNOS

4

Background• Nnwa discovered in 1999. Same structure drilled as Doro in the adjacent OPL 219

same year. Nnwa-2 Appraisal drilling 2002

• Partners in OML 109 (OPL 218) Statoil (Operator) and ChevronTexaco

• Partners in OPL 219 Shell (Operator), ExxonMobil, Total and Agip

• Water depth 1400 meters, main reservoir fluid is dry gas

• Floating LNG evaluated by both Operators to be possibly the most promising concept for commercialising of the Nnwa Doro gas resource in 2002

• MoU signed in June 2002 terminated Dec 2003

• Upstream and Mid stream scoping work 2004 by OML 109– Upstream 20 wells and sub sea production system– Midstream FLNG and onshore LNG

TNOS

5

Design Basis - Arrival Conditions• Feedstock flowrate: 920 mmscf/d

– ~17 year on plateau– ~9 years on decline

• Arrival conditions:

• Space will be provided for future re-compression• Operating range: 50 – 100% of design throughput

Phase of production Total gas rate

mmscf/d

Pressure Offshore

@ battery limit

Temperature

@ battery limit

Initial 920 490 - 75 bara 20 – 90 °C

End of initial depletion 920 75 bara 20 - 90 °C

End of plateau 920 40 bara 20 – 90 °C

End of field life 250 40 bara 20 – 90 °C

TNOS

6

NnwaDoro FLNG concept

FLNG cap

Gas prod : 920 mmscf/d

LNG : 5,77 MTA

LPG: 0,30 MTA

Cond Prod: 35 kbpd

Hull Storage

LNG: 240 000 m3

LPG: 80 000 m3

Cond: 120 000 m3

TNOS

7

Layout Summary

Updated FLNG study

2004

MOU FLNG study

2003

Topside length inclusive

safety gaps

368,2 m 329 m

Topside width 76 m 81,2 m

Footprint area 27 983 m2 26,715 m2

Number of Modules 5 10

Numbers of levels 3 - 4 3 - 4

Steel Barge 450m x 76m 435m x 81,2m

TNOS

8

NnwaDoro FLNG concept (450m x 76m)FLARE

FIRE/BLAST WALL

INLET/GASTREATMENTMODULE

LIQUEFACTIONMODULE

FRACTIONATIONMODULE

LAYDOWN AREA

POWER GENERATIONMODULE (5 + 1)

LAYDOWN AREA

LIVINGQUARTERS

WORKSHOPS

UTILITY/ELECTRICALEQUIPMENT MODULE

OFFLOADING AREA

OFFLOADING TANKER

RISERS

CHOKEMODULE

CHEMICAL TOTE TANKS& INJECTIONSKID

TNOS

9

Topside FLNG Weights

Updated FLNG study

2004

MOU FLNG study

2003

Master Equipment List –Tonnes

%

14 462

25.6

15 512

26.4

Structure –Tonnes

%

26 623

47.2

27 143

46.2

Bulk –Tonnes % 15 330

27.2

16 125

27.4

Weight allowance included 15% 15%

Total -Tonnes 56 415 58 780

Weight outside topside area 6 473 5 980

TNOS

10

Steel Hull issues• The hull concept design is based on:

– Double hull used for ballast water

– Double deck areas (dry voids)

– Steel deck fully insulated over full deck area for process modules

– LNG tanks of either the membrane or SPB type

– LPG tanks non-pressurised fully refrigerated design

– Living Quarters for 200 persons at the aft end of the hull

• NnwaDoro topside footprint/ topside area requirement dictate the size

of the hull

• Flare is positioned at the bow

TNOS

11

NnwaDoro FPSO concept and onshore LNG plant

Offshore FPSO cap

Gas prod : 967,5 mmscf/d

Cond Prod: 32 kbpd

Storage

Cond: 159 000 m3

Onshore plant cap

Gas prod : 920 mmscf/d

LNG : 5,63 MTA

LPG: 0,34 MTA

Cond Prod: 4 kbpd

TNOS

12

LNG plant Layout

• Tank farm cap

– 2 x 150,000 m3 LNG tanks

– 1 x 50,000 m3 Propane tank

– 1 x 50,000 m3 Butane tank

– 1 x 36,000 m3 condensate tank

• Infrastructure for surrounding

districts, e.g. roads / township / civil

amenities /airport / etc. is excluded

from the present scope

C4 C5+

C3

TNOS

13

Cost and scheduleAssumptions

• ESTIMATE ASSUMPTIONS

– The estimate is prepared in USD mid 2004 values

– Basis for the estimate are the update of results from technical

studies in the MoU phase

TNOS

14

CAPEX estimates – Scoping conceptsMOU FLNG

MUSD 2003

Updated FLNG

MUSD 2004

Offshore & Onshore

MUSD 2004

Upstream costs (20 wells) 1073 1505 2799

Drilling 661 835 835

Sub sea production system 412 670 670

Pipeline to shore - - 319

FPSO - - 976

FLNG concept 2835 2970 -

Topside facilities 1992 2185 -

Riser tower and turret 380 - -

Steel hull including LQ 463 785 -

Onshore plant - - 3089

Total costs 3908 4475 5888

TNOS

15

Price expectations Feb 2005

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00$

/MM

Btu

HH Forw ard

Real yearly average

The current market assumes that the US natural gas prices in real terms will move towards 4,00 05USD/MMBtu by 2010

TNOS

16

Nigeria block 218 – NnwaDoroAssumptions• Condensate sales price:

– $25 ‘04/bbl ’04

• LNG sales price:

– $4,0 ’04/mmbtu, Henry Hub

• Regas tariff $0,55/shipping tariff $0,50 FOB price = $2,95 ’04

• Propane sales price:

– $217,4 ‘04/t

• Butane sales price:

– $216,0 ’04/t

• Inflation:

– 2,5%

• Discount rate:

– 10% nominal

• All values given as 100% project, un-risked

TNOS

17

Nigeria block 109 – NnwaDoroAssumptions

•No abandonment cost included for midstream (useful life of asset

longer than assumed production period)

•For upstream; condensate volumes treated according to oil terms, gas

volumes according to new gas terms. Cost split according to relative

shares of total volumes.

•Export pipeline treated as subsea cost (VAT/import duty) in upstream

TNOS

18

NnwaDoro cases - results

Base case

NPV@10%

nom

IRR

Case 1 NnwaDoro subsea

dev., gas sales to

FLNG

1446 15,5%

Case 2 NnwaDoro FPSO dev.,

gas sales to onshore

plant

459 11,3%

TNOS

19

Summary

• Need to negotiate gas PSC and pre-unit agreement to be able to move project forward

• Gas PSC and pre-unit necessary must be in place before embarking on further appraisal drilling

• Statoil is prepared to take the leadership and fast track the NnwaDoro project

• Technical Feasibility has been demonstrated

• Reduced sub surface uncertainty and increased reserve basis is a requirement for moving forward

• US market is the key target

TNOS

20

Way Forward1. Exploration drilling2. Appraisal drilling ongoing3. FLNG MoU phase4. OML 109 data trade (no success towards OPL 219 and OPL 246)5. OML conversion6. Re-processed seismic7. Subsurface evaluation OML 109/ OPL 219 (ongoing)8. Negotiate gas PSC/ pre-unitisation agreement (gas terms)/ Joint operating

agreement9. Prepare NnwaDoro assessment plan and budget10. Drill appraisal wells 11. Subsurface evaluation12. Concept evaluation13. Establish commercial structure/terms14. Concept selection15. FEED16. Finalise commercial agreements and fiscal terms17. Sanction (FID)18. Construction and pre-drilling phase19. Production start

TNOS

21

20092005

Current OML 109 Long term development plan

2006 2007 2008 2010 2011 20122004Gas terms

Gas PSC/Pre unit agreement

Subsurface EvaluationPhase 1 & 2

Appraisal Drilling ( 2-3 wells)

Phase 3

Conceptual evaluation

Concept selection

PRE-FEED & FEED

Commercial Structure/unitisation

Sanction (FID)

Construction and pre-drilling phase

Production start

Keys to delivery1. Negotiate gas PSC2. Partner alignment3. Sufficient reserves4. Cost effective concept

ITT process

Scoping work

ITT process