Lagos — The Forcados terminal operated by Shell Petroleum and Development Company, SPDC, has been losing 35, 000 barrels per day of crude oil export for over one year now.
According to the Nigerian National Petroleum Corporation, NNPC’s monthly report for January 2019 report- the latest, the terminal which also gets fed with crude oil from Trans Ramos Pipeline (TRP)/ Brass Creek has been shut down since 24th April 2018.
The shutdown was due to leaks in a creek crossing in the Odimodi area with loss of 35, 000 barrels per day of production into the Forcados Terminal.
SPDC said it confirmed four leak points on the pipeline.
The document said the line remains shut “to date”, and the repairs still ongoing.
Huge loss to Nigeria
The shutdown which begun since April 24th last year makes it more than a year now since Nigeria has been losing 35, 000 barrels of oil production per day, loss of a whopping 12, 775, 000 barrels this year’s April 24.
IOCs owe Nigeria N710b in oil JVs
A document Breakdown of 2019 FGN Budget Proposal signed by Minister for Ministry of Budget & National Planning, Senator Udoma Udo Udoma had said International Oil Companies, IOCs currently owe Nigeria N710 billion revenue from oil Joint Ventures, JV asset restructuring, thereby, delaying implementation of the country’s national budget, especially that of 2018.
According to a document, the federal government said the JV debt was “largely” responsible for its low performance in terms of budget implementation.
It further explained that the government was able to meet just 53 percent overall revenue of the target in the 2018 Budget.
Total revenue expected for 2018 was budgeted at N9,120.33 billion while that of 2019 was put at N8,826.64 billion- N293.7million or -3.22 percent lesser.
According to the document, the unrealised N710 billion from oil JV asset restructuring has been “rolled over” to 2019.
The country maintains between 55 percent to 60 percent shares in its JVs.
State Oil Company, the Nigerian National Petroleum Corporation, NNPC owns a 55 percent stake in its joint venture with Royal Dutch Shell.
However, it owns 60 percent stakes in others such as Chevron and ExxonMobil.
The President also directed that immediate action be commenced to restructure the JV oil assets so as to reduce government shareholding to 40 percent and that the exercise must be completed within the 2019 fiscal year.
“We have again, reflected projected proceeds from oil assets ownership restructuring as revenues for transparency & monitoring. Expected funds have been earmarked to fund critical capital projects like this was not achieved in 2018”, the document read.
2019 budget implementation under threat too
Nigeria’s main source of revenue generation is through the export of crude oil.
With the year almost half spent, and going by the huge loss due to lack of exports from the terminal, the country’s 2019 N8.8 billion budget also stands a risk of underperformance as 52.9 percent revenue is expected to come from the oil sector.
Crude oil had been selling at over $70 per barrel since the beginning of the year, dropping to around $69/b on Thursday.
In March, SweetcrudeReports had reported that the TRP was undergoing post-repair testing.
This puts a strain on Nigeria’s target of attaining production of 2.3 million barrels per day as stated in the country’s 2019 budget, with an oil benchmark of $60 per barrel.
Sources close to the matter hinted that although the pipeline had been repaired in late December however, it is undergoing extensive testing which includes statutory post-joint investigation visit activities, site assessment, remediation, and payment of compensation to the people and communities, Aghoro community in Bayelsa State, and Odimodi community in Delta State, impacted by the spills.
The terminal which also gets crude from the Trans Forcados pipeline was shut for the most part of 2016, following a series of attacks by Niger Delta militants.
Operators of the Trans Forcados Pipeline, TFP Heritage Energy, had recently declared a force majeure due to fire from leaks.
The force majeure was eventually lifted last Friday.