11 March 2016, Lagos – Nigeria is losing about 300,000 barrels of crude oil per day due to the bombing of Forcados pipeline that conveys Forcados grade of crude oil to the over 400,000 barrels per day Forcados Export Terminal, one of the country’s biggest export terminals in the Western Niger Delta.
The loss, which translates to an average of $12 million daily at an oil price of $40 per barrel, arose from the damage caused on the 48-inch underwater pipeline, which disrupted crude oil flows to the export terminal.
It was also gathered that the loss may have eroded the gains Nigeria would have derived from the recent rise in oil price.
The affected Trans-Forcados Pipeline, which is operated by Shell Petroleum Development Company of Nigeria Limited (SPDC), belongs to the Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).
THISDAY gathered that Shell, Seplat Petroleum Development Company Plc, Shoreline Resources Limited, Neconde, First Hydrocarbon Nigeria (FHN) and NPDC are some of the companies operating in the western Niger Delta that convey their crude oil through the pipeline.
Investigation also revealed that some marginal field producers such as Pillar Oil, Midwestern Oil and Gas, Platform Petroleum and Energia also convey their crude oil through the pipeline
However, it was learnt that these marginal field producers have another alternative route through the pipelines operated by the Nigerian Agip Oil Company (NAOC) to carry their crude oil to Brass Export Terminal.
THISDAY also learnt that Seplat had built alternative pipeline to supply crude oil from its western Niger Delta operation to the Warri Refinery but still uses the Forcados pipeline.
The Chief Executive Officer of Seplat, Mr. Austin Avuru, had told THISDAY in an interview that the persistent shutdown of the pipeline was a major problem the oil producers operating in the western Niger Delta.
“Once Trans Forcados is down, all of us suffer….So, the Trans Forcados remains a huge problem for all of us, producers in the western Niger Delta, who deliver crude oil to Forcados. When it is down, everybody suffers; we have production outage and therefore, for the period, there is no production for the country,” Avuru had told THISDAY
The closure of the oil pipeline, which also accounts for 40-50 per cent of the country’s gas production, may have also led to the current drop in power generation by over 1,000 megawatts, THISDAY has learnt.
The pipeline is a crude oil facility, but the gas and liquid condensates produced from gas fields the western Niger Delta are evacuated through the pipeline, hence its closure has also affected the supply of gas to the power stations.
Shell had on February 21, 2016 declared force majeure on Forcados liftings effective 1500hrs (Nigerian time), following the disruption in production caused by the spill on the Forcados Terminal subsea crude oil export pipeline.
The company also intensified efforts on containment and oil recovery from the February 14, 2016, spill, while also finalising repair plans, which the Minister of State for Petroleum, Dr. Ibe Kachikwu, said could take up to May 2016 to complete.
The minister also added that Nigeria was producing 2.3 million barrels per day before the incident.
“Supported by industry group Clean Nigeria Associates (CNA) and other oil companies, SPDC has deployed specialised equipment to contain the spill. SPDC has also mobilised clean-up teams and contracted a specialised aircraft to join in the response. Production into the terminal and crude oil exports were stopped soon after the spill was discovered,” Shell had said in a statement.
According to Shell, diving teams which inspected the export pipeline reported extensive damage that was consistent with the application of external force, an indication that it was a sabotage.
- This Day
