VAALCO Energy has revealed that it is postponing its Etame Marin Crude Sweetening Project (CSP) offshore Gabon till declining oil prices in the global market recovers and support positive economic returns.

According to the Chief Executive Officer and Director of VAALCO, Steve Guidry (photo), even though it was suspended, the groundwork of the project has been set to rapidly and efficiently resume the project when the prices of crude in the international market gets to an acceptable level.

“Although over 15 potential solutions were identified and evaluated to remove hydrogen sulfide (H2S) from produced fluids, none are economic in the current depressed oil price environment,” he said.

Guidry disclosed that on January 25, 2016, the company discharged the Constellation II rig operated by Transocean as it no longer plan to drill any wells in 2016 on its Etame Marin block, “we are pleased with the overall results we achieved with our 2015 drilling program as we reversed the decline in our production and meaningfully increased our volumes. Due to the continued sharp decline in oil prices we have determined additional drilling to be uneconomic”.

Due to this, VAALCO estimate its capital expenses for 2016 to be from $4 to $6 million. The company said talks are ongoing with Transocean concerning the outstanding rig contract term which is believed to have the highest exposure of about $7 million, Offshore Energy Today reports.

Anita Fatunji