* Project had been expected to start mid-year
* Shares gain more than 2 pct (Adds analyst comments, details, background)
By Jeffrey Jones
CALGARY, Alberta, Feb 24 (Reuters) - One of a few key projects Nexen Inc is banking on for a corporate turnaround has started producing oil earlier than expected, prompting investors to push the Canadian energy company’s shares up more than 2 percent.
The Usan oil field off the Nigerian coast, operated by France’s Total SA and seen as a counter to a host of recent production problems at Nexen, had originally been expected to start up around the middle of the year.
The field is located 100 km (62 miles) southeast of the Nigerian coast. It designed to eventually produce 180,000 barrels a day, with 36,000 net to Nexen. It has factored 14,000 to 28,000 barrels a day into its 2012 output forecast.
The company has spent C$1.6 billion ($1.6 billion) on its 20 percent share of Usan.
Nexen shares were up 44 Canadian cents at C$21.30 on the Toronto Stock Exchange. They have climbed more than 30 percent this year, making it the best-performing stock among Canadian senior oil producers, as the company puts in place fixes for a string of operational problems that plagued it in 2011.
They included dealing with chronically weak production gains at the Long Lake oil sands project in Alberta, frequent downtime at the Buzzard oil field in the North Sea and the loss of a production sharing contract amid civil unrest in Yemen.
Moves culminated in the departure of its chief executive, Marvin Romanow, in January. A search for his replacement is still going on, Nexen spokeswoman Patti Lewis said.
The early startup of Usan is one of several indications that Nexen is “showing some solid signs of turning the corner,” CIBC World Markets analyst Andrew Potter said in a note to clients.
Despite the gains, Nexen is still one of the cheapest oil-weighted stocks, based on estimated 2012 and 2013 cash flow, Potter said.
Nexen’s other partners in Usan are Chevron Corp and Exxon Mobil Corp.
Discovered in 2002, the field is in water depths ranging from 750 to 850 metres. The project’s floating production, storage and offloading vessel has storage capacity of 2 million barrels, making it one of the world’s largest.
For Nigeria, its oil exports will jump to their highest level in four months in April as output from the field starts, traders and shipping sources said.
$1=$1 Canadian Additional reporting by Bhaswati Mukhopadhyay in Bangalore; editing by Rob Wilson