(Ecofin Agency) - The Nigerian Agip Oil Company, a subsidiary of Italian oil major Eni, has announced that the Zabazaba and Etan deep water project on Oil Prospecting Licence 245, will generate $8billion for the Federal Government.

According to the Managing Director of the company, Massimo Insulla, the promoters of the deep water project are eager to take the final investment decision and are determined to make it profitable notwithstanding the sustained low price of crude oil. He added that the company had been attracting both local and international contractors in the past four months for the project.

NAOC is developing the Zabazaba and Etan deepwater integrated project in collaboration with Shell Nigeria Exploration Company and is committed to developing the project in line with the Nigerian Content Act to create jobs for Nigerians, a statement from the Nigerian Content Development and Monitoring Board (NCDMB) said.

The Executive Secretary, NCDMB, Simbi Wabote, said that the Board would support the implementation of the project through timely review of contract tenders and the execution of essential approvals bearing in mind the urgent need to boost the country’s crude oil production capacity and increase revenue for the economy, Punch news reports.

OPL 245 is located on the southern edge of the Niger Delta, in water depths ranging from 1,700 to 2,000 metres. The block holds significant discovered hydrocarbon reserves and is thought to be very prospective.

The Etan and Zabazaba fields were discovered in 2005 and 2006 respectively. The Field Development Plan requires the conversion of a Very Large Crude Carrier (VLCC) to a Floating Production Storage and Offloading (FPSO). The two fields are in water depths of between 1,500 and 2,000metres.

According to sources at the Department of Petroleum Resources, the cost of development is around $9 Billion. Recoverable reserves for the two fields are 500Mmbbls.

Anita Fatunji