FG, IOCS LOSE N684BN TO OIL PIPELINE SHUTDOWN
Eight months after the shutdown of the Trans-Ramos Pipeline, the Federal Government, Shell, Total and Nigeria Agip Oil Company Limited have lost about $1.9bn (N684bn) in potential revenue from the sale of crude oil.
Shell Petroleum Development Company of Nigeria Limited announced on May 25 last year that it had shut down production following the discovery of leaks on the pipeline, which is located in the swamps of western Niger Delta.
The SPDC is the operator of a joint venture involving the Nigerian National Petroleum Corporation, which holds 55 per cent; Shell, 30 per cent; Total Exploration and Production Nigeria Limited, 10 per cent; and NAOC, five per cent.
The Trans-Ramos Pipeline, which supplies crude oil to the SPDC JV-owned Forcados export terminal, has a capacity of around 100,000 barrels per day. Calculations of potential lost revenue by our correspondent showed that the decline of 100,000 bpd in the nation’s oil exports in eight months meant a loss of $1.90bn or N684bn (using an exchange rate of N360/$1).
Bonny Light, the nation’s reference crude grade, traded at an average of $75.38, $74.72, $73.35, $79.59 and $79.18 per barrel in June, July, August, September and October respectively, according to latest data obtained from the Central Bank of Nigeria on Wednesday.
The international oil benchmark, Brent crude, against which Nigeria’s oil is priced, averaged $64.75, $58.92, $59 and $63.96 in November and December, January 2019 and February respectively, according to the US Energy Information Administration.
The SPDC told The PUNCH in late December that the pipeline had been repaired but had yet to come back on stream as it was undergoing extensive testing prior to restart. It said statutory post-joint investigation visit activities were ongoing, which included site assessment, remediation, and payment of compensation to the people and communities impacted by the spills.
An SPDC’s spokesperson, Mr Bamidele Odugbesan, told our correspondent on Monday that he could not give precise timing yet for the restart of the line. He said the pipeline would come back on stream “when the post-repair testing is concluded.”
The SPDC said in August that it had recovered over 95 per cent of spilled oil from the recent spill incidents on sections of the pipeline in Aghoro community, Bayelsa State, and in Odimodi community in Delta State.
The oil major said the pipeline had remained shut since the incidents. “As soon as clean-up and site assessment are completed, we are committed to starting the immediate remediation of the impacted areas in Aghoro and Odimodi,” a spokesperson for the SPDC said.
According to the spokesperson, details of the cause and impact of the spills will be captured in the JIV reports, which will be released after sign-off by all parties.
The PUNCH reported on Monday that the nation’s crude oil export had suffered a setback following the shutdown of the Nembe Creek Trunk Line, one of the major crude oil transportation channels used for export.
Aiteo Eastern Exploration and Production Company, the operator of the trunk line, said it was shut on February 28 due to an undisclosed outage while a nearby fire at the weekend did not impact the pipeline. Loading of Nigeria’s Forcados crude oil, one of the nation’s largest export grades, was reported on Monday to have been delayed by at least 10 days after a leak on the main pipeline.
Reuters quoted a source as saying that flows through the key Trans Forcados pipeline were temporarily reduced while the leak was being repaired last week. SPDC is the operator of the Forcados export terminal. The pipeline usually carries between 200,000 and 240,000 barrels of oil per day.