Nigeria’s oil production to increase as Shell resumes export at 400,000bpd Forcados terminal month end

Nigeria’s oil production is set to rise again after months of under-production and a significant drop in foreign exchange earnings from oil export due to crude theft and vandalism, as Shell Petroleum Development Company Limited (SPDC) hinted yesterday that its 400,000 barrels per day (bpd) Forcados Oil Terminal would resume export operations by the end of this month.

By then, the oil major said it expects that on-going essential repairs on the facility would have been completed and begun normal export operations.

SPDC’s Media Relations Manager, Abimbola Essien-Nelson, disclosed this in a statement yesterday, saying, “In addition to the repairs, we are working to remove and clamp theft points on the onshore pipelines to ensure full crude oil receipt at the terminal.”

Shell had declared a force majeure on the Forcados Oil Terminal Offtake Programme due to integrity compromise through constant oil theft, which it said posed an “existential threat”.

According to Essien-Nelson, the active illegal connections to SPDC joint venture’s production lines and facilities in western Niger Delta as well as the inactive illegal connection to the onshore section of the 48.” Forcados Export Line are in the company’s on-going programme to remove illegal connections on the pipelines that feed the terminal.

She said, “SPDC gives priority to the removal of active illegal connections and to illegal connection points that have leaks. This scheduled programme is continuous as new illegal connections are identified during surveillance of the pipelines.

“An example of such illegal connection is on the onshore section of the 48” Forcados Export Line, which is currently not active and has no sign of leak at the interconnection point.”

According to Global research and consultancy group, Wood Mackenzie (WoodMac), the terminal has an oil export capacity of 400,000 barrels per (bpd).

It described the Forcados Oil Pipeline System as, “the second largest network in the Niger Delta, and transports oil, water and associated gas from fields in the western delta to the Forcados oil terminal.

“The Trans Forcados Pipeline (TFP) is the major trunk line, into which feed multiple branches from onshore fields. At the Forcados River manifold, its capacity is 850,000 b/d,” and was hitherto by Shell until 2012.

Essien-Nelson reiterated SPDC’s commitment to running its assets safely, reliably and in accordance with globally accepted standards.

“SPDC continues to work tirelessly, alongside government and partners, towards the eradication of crude theft from its infrastructure,” she said.

SPDC gives priority to the removal of active illegal connections and to illegal connection points that have leaks. This scheduled programme is continuous as new illegal connections are identified during surveillance of the pipelines.

Nigeria’s oil export recorded its lowest drop in about 30 years due to incessant oil theft and pipeline vandalism, which forced many of the operators shut down production.

In September, the Nigerian National Petroleum Company (NNPC) Limited, which is in a joint venture with SPDC, had announced that the country was losing 470,000 bpd of crude oil, the equivalent of $700 million monthly to oil theft.

The Organisation of the Petroleum Exporting Countries (OPEC) in its September report indicated Nigeria’s inability to meet its crude oil production quota of 1.826 million bpd, as it produced a paltry 927,000 bpd in August.

Confirming the development, the National Upstream Petroleum Regulatory Commission (NUPRC), said crude oil production fell month-on-month by 11.47 per cent to 0.972mbpd in August from 1.08mbpd in July 2022.

The persistent decline continues to constitute a critical financial strain on the federal government’s budget implementation, as oil proceeds account for 80 per cent of its revenue and foreign exchange earnings.