No abstract

Fiscal system is the basis for the estimation of take statistics ratio between Government and Contractor. This has been the case for the different versions of Nigeria's Royalty and Tax system and Production Sharing Contracts. Modifications in the currently proposed petroleum industry fiscal bill promise to ensure oil and gas availability, accessibility and affordability. Favorable upstream petroleum operations underlie the development and expansion of the midstream and downstream sectors. Fiscal incentives available to contractors make investment a worthwhile venture for both the government and contractor. The recently proposed petroleum industry fiscal bill (PIFB) 2017 is a favorable development because it is anticipated to reduce tax burden on investors, increase government take from royalty schemes and a dual tax system imposed on oil and gas projects. This paper applies a deterministic and stochastic cash flow model, analyzes the fiscal provisions of the existing royalty and tax system, production sharing contract and the proposed petroleum industry fiscal bill, 2017. Results from the model present a friendly royalty and tax deduction strategy in the proposed bill, which provides an incentive for investors to re-invest in the midstream and downstream sectors. However, the provision in the petroleum industry fiscal bill (PIFB) 2017 for royalty deduction during windfall is rather too fair at $50/bbl, considering a benchmark profitable oil price of $35/bbl during windfall. This paper suggests $35/bbl price for windfall threshold price for the additional $0.2 per dollar increase in oil price for royalty by value determination.

Severe slugging involves large magnitude fluctuations in pressure and flow rate in a riser due to low gas flow rates and low Gas-liquid ratio (GLR). This work evaluates two mitigation concepts: topside choking and riser base gas lift to determine which technique is more desirable. A base case model was created to understand the nature of slugging with an input mass flowrate of 15kg/s, separator operating at 22.5Bar and 370C. After 8hours of simulation, the presence of a severe slug was observed at the production riser. Two models were created from the base case to mitigate the severe slugging. An introduction of topside choke to eliminate or reduce the riser slugging, likewise deployment of Riser base gas lift (RBGL) to achieve the same purpose. The result indicated that with the introduction of the topside choke and reducing the opening percentages of the choke from 80% to 5% stepwise, the slugging amplitudes were greatly reduced from 3.3bar to 0.3bar. Though this led to back pressure and a reduction in production. A 50% choke opening was suggested as the optimal choke opening for the simulated case. Results from the introduction of dehydrated gas with a mass flow rate of 1.2kg/s at the riser base indicated slug elimination from the riser and flowline. The results of this simulation were observed at the end of the riser (inlet to the separator) after about 8hours 20mins This report identifies that of the two simulated techniques (topside choking and RBGL), RBGL is more efficient in addressing slug issues without impacting field production.