Shell, others shut down production

Oil Rig

By Dike Onwuamaeze

The expectation that Nigeria would earn more revenue as the oil prices are increasing in the international oil market may not be realized due to low production capacity. Pipeline vandalism in the Niger Delta area is forcing some of the major oil producers to shut down their oil wells. Last week, Shell Petroleum Development Company (SPDC), Seplat Petroleum Development Company and four other  Nigerian companies comprising Shoreline Resources Limited, Neconde, First Hydrocarbon Nigeria (FHN) and Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) shut down some oilfields located in the western Niger Delta,

These companies were forced to shut down production due to the vandalism of the Trans Forcados Pipeline (TFP), which transports crude oil from the producing fields to the Forcados Export Terminal.

Austin Avuru, chief executive officer of Seplat, said that the vandalism poses a big threat to their operation. He said: “Once Trans Forcados is down, all of us suffer. In 2014 we budgeted 35 days of outage but we ended up suffering 75 days of outage. In the first 30 days of this year, we have already suffered 15 days of outage. So, the Trans Forcados remains a huge problem for all of us, producers in the western Niger Delta, who deliver crude to Forcados. When it is down, everybody suffers; we have production outage and therefore, for the period, there is no production for the country.”

It was learnt that the company shut down its flow stations at Oben in OML 4, Amukpe in OML 38 and Sapele in OML 41, because of a leak caused by sabotage on the Odidi axis of the pipeline.

Vandals had earlier damaged the pipeline, resulting to the shutdown of crude oil production by these companies from late December 2014 to the first week of January 2015, before they struck again in the first week of March and more recently, in the last week of April to the first week of May.

The shutting of Shell’s facilities is costing the country the export 189,000 barrels of crude oil per day, following what it described as “series of leaks” in the Trans Forcados Pipeline. Similarly, NPDC also shut down about 100,000 barrels of oil equivalent per day, and also reported 592.91million standard cubic feet per day of gas production at the weekend representing, a shortfall of about 110mmscf/d due to the vandalism

Shoreline Resources, Neconde, and First Hydrocarbon Nigeria were also said to have shut down OML 30, 42 and 26, respectively.

OML 42 is also made up of Odidi, Ajuju and Jones Creek fields, which were vandalised during the militancy years, resulting in the sale of the 45 per cent stake to Neconde by Shell, Total and Eni.

The closure of the Trans-Forcados oil pipeline earlier this year due to sabotage led to a drop in power generation by 1,500 megawatts.

The pipeline is a crude oil facility, but gas fields that supply gas to power stations had to be shut down because the liquid condensate they produce together with gas is normally evacuated through the pipeline.

[divider]

About The Author

Related posts

Please wait, while your subscription is progressing...

Subscribe to TheEconomy Newsletters & Notifications

Want to be notified when our article and news are published? Enter your email address and name below to be the first to know.