*Operators’ resilience keeping production level at 1.9m b/d
26 June 2016, Abuja — Nigeria may in the next two weeks increase the volume crude oil it produces and pumps every day from her oil fields to 2.3 million barrels (mb), a reliable official source in state oil company, the Nigerian National Petroleum Corporation, NNPC, disclosed yesterday.
The source who spoke on the condition that his name would not be disclosed in this report explained that the back channel overtures initiated by Minister of State for Petroleum Resources, Dr. Ibe Kachikwu to halt the bombing of oil facilities and disruptions in production by militants in the Niger Delta were already yielding results.
He said, based largely on the resilience of operators in the country’s oil fields, repair of vandalised facilities have been largely completed and production resumed.
Although the source did not list which of the oil facilities had been repaired and from which the increase in volume was achieved, indications are that it may include Eja OML 79 run by Royal Dutch Nigeria subsidiary, Shell Petroleum Development Company, SPDC, where production of 90,000 barrels is achieved every day; Obi-Obi Brass trunk line belonging to Agip ENI in Bayelsa State; Nembe 1, 2 and 3 Brass to Bonny Trunk Line belonging to Agip and Shell; as well as Chevron’s Makaraba line on the offshore Okan manifold amongst its other facilities at Abiteye, Utunama and Makaraba platforms in Warri South-west area of Delta State.
According to him, operators are already ramping up their production levels and could within the second week of July hit 2.3m b/d, perhaps some few weeks ahead of Kachikwu’s earlier projection of August as a cut-off date to restore Nigeria’s production to about 2.2m b/d.
Kachikwu had last month said he hoped to in his dialogue with militants in the Delta, end the destruction of facilities; restore production and ramp up the countries volumes to insulate the 2016 budget from taking a bashing from low revenue from oil.
The country had indexed its 2016 budget on the price level of $38/b for oil. Currently, oil prices averaged $47/b on news of Britain’s decision to exit from the European Union after its Thursday referendum.
“Largely on the back of resilience of the operators; the speed with which they fixed those pipelines and come back into business and restore production levels and start to ramp them up to try and compensate, these resulted in that,” said the source when asked about how the country seemingly maintained a healthy production level despite attacks that had left operations uncertain since February.
He further stated: “We are already just a little below 1.9m b/d and hopefully in another week or two we should be ramping up to about 2.3m b/d which is what the minister shared in the conference at the Transcorp.”
Kachikwu, it was learnt, had spoken to lawyers in Abuja on this when he attended a session organised by the Nigeria Bar Association, NBA.
“So, it is just the efforts and ruggedness of the operators to restore facilities that were disabled quickly and at a very shortest possible time to increase production to normal level and even above to compensate for the losses. Even the pipelines that were running through the creeks and swamps as well as the shallow end of the waterways have been restored,” he added.
He however said the about 6m b/d Forcados export terminal was still being repaired.
“Forcados is still a challenge and it is being worked on but we will get there. We are recovering and the engagement with the Niger Delta group that the minister is championing is also helping to maintain peace to allow the operators restore capacity,” the source said.
*Chineme Okafor – Thisday