Lekoil: How We Became Nigeria’s First Oil Firm to Bring Marginal Field to Production in 18 Months

Lekoil Limited, one of Nigeria’s indigenous oil and gas Exploration and Production (E&P) companies, has narrated how it became the first Nigerian firm to reach first oil  from a margins field in the country

Speaking on a panel at the Nigeria International Energy Summit (NIES) in Abuja, with the sub-theme: “From Resources to Revenue”, Chief Operating Officer of the company, Mr Sam Olotu, noted that the firm had to strategically navigate its financing challenges.

On the panel with Olotu were: Managing Director, Heirs Energy, Osayande Igiehon; MD, TotalEnergies Companies in Nigeria, Mathieu Bouyer; MD, SunTrust Atlantic Energies, Ugo Okafor; MD, Aradel Holdings Plc, Adegbite Falade, among others.

Olotu recalled that Lekoil came into the oil industry in 2013 and was not immediately successful in the divestment round in 2013 and 2014. However, he added that it was a wake-up call for the company.

“So we had to go back to our drawing board and re-strategise and say how do we get into the business. So we decided to do it the hard way. So we had to do the traditional exploration study and other gamut and we farmed into one of our assets, 310.

“And in 2013 when we drilled Ogo, it was classified by Wood and McKenzie as one of the top three world discoveries in 2013. So it paid off. So at the end of 2013, we were sitting on over 3 billion equivalent of contingent resources and triple that in terms of prospective resources.

“Not that we didn’t have access to funds, but you can’t go back when you have such a beautiful thing, you can’t go back cap in hand to your investors and say they should provide you funding for such a huge asset.

“So we had to re-strategise in order to get a cash flow base, in order to now  develop the resources that we have. So that was how, again, went back to the drawing board and funding as technical and financial partner into a marginal field.

“And, indeed, we brought that marginal field because we were kind of not chasing the maturation of resources, but we were chasing cash flow. So that’s how we gained the confidence of our investors. And we brought that marginal field, at least as of today, the fastest marginal field that came on stream within 18 months,” he added.

According to him, today that marginal field has produced close to 20 million barrels, and is  ramping up to 20,000 barrels per day with its partner.

“So gaining confidence with your investor in terms of your capability to do what you promise to do, to work the plans as you presented to the investor is key. And focusing on your cash flow is very key. And you need to convince your investor that you are not going to do things in the conventional way.

“Because it’s very easy when you have discovered one of the top largest discoveries in the world, they would traditionally think that you are an exploration company. And like was mentioned, we didn’t have a reserve-based lending friendly environment around that time. So you just have to anchor down and show your path to production and your cash flow. And that we have done successfully,” he added.

Separately, Nigeria LNG has called for energy security to be made a national priority and has emphasised the need for proactive measures to protect energy infrastructure and drive sustainable growth.

Speaking at a panel session titled “Driving Cross-Continental Investments: Scaling Africa’s Energy Frontier” at the 8th NIES, Philip Mshelbila, NLNG’s Managing Director and Chief Executive Officer, highlighted the growing concerns over gas infrastructure security.

He noted that while improvements have been recorded in securing oil assets, that gas infrastructure remains vulnerable, and without adequate protection which will lead to underperformance in the industry.

Mshelbila stated that NLNG was focused on boosting both domestic and regional energy access, adding that the company was making smaller-scale investments to retain more gas for local consumption.

He noted that a major step in this direction was NLNG’s decision to domesticate 100 per cent of its Liquefied Petroleum Gas (LPG) supply for the Nigerian market.

Beyond the domestic market, Mshelbila remarked that the company was also working towards enhancing regional energy security. He revealed that, as part of the Train 7 project, the company was constructing a third jetty to support small-scale vessels in supplying gas across Africa’s coastal markets.

Meanwhile, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, has called for a robust and strategic policy framework to unlock Africa’s vast gas resources and ensure energy security, economic diversification, and sustainable industrialization.

Speaking at the NIES in Abuja, yesterday, Ekpo stated that with over 600 trillion cubic feet of proven natural gas reserves, Africa holds significant potential for energy security, economic growth, and sustainable development.

However, he noted that unlocking this potential requires more than just resources – it demands a well-designed policy framework that fosters investment, innovation, and infrastructure development.

The gas minister identified several policy imperatives that must be prioritised, including: clear regulatory frameworks to encourage local and foreign investment in gas exploration, production, processing, and distribution; infrastructure Development: expansion of LNG terminals, pipelines, and domestic gas distribution networks.

Others, he said, include local content and capacity building to promote local participation and skills development in the gas sector; sustainable environmental policies to reduce gas flaring, adoption of carbon capture technologies, and incentivising green energy projects.

While acknowledging the vast opportunities in Africa’s gas sector, Ekpo also highlighted several challenges that must be addressed, including financing constraints, security and stability concerns, infrastructure deficits, and domestic gas market development.

To overcome these challenges, Ekpo emphasised the need for innovative financing models, infrastructure expansion, and regional collaboration.

 “It is a well-known fact that large-scale gas projects require significant capital investment, yet access to finance remains a challenge for many African nations. Innovative financing models, including gas monetization schemes and blended finance, must be explored,” he said.