Page 7 - Nigeriaone mag 3 edition en

Crude Oil Underproduction Persists in Nigeria

Oil terminal, illustrative image

Crude oil production in Nigeria is likely to continue than 5 percent of crude volume from the Trans
to experience a decline as repair works in Forcados Niger Pipeline (TNP). The massive reduction in
terminal are far from completion. A key oil terminal supply through the TNP is regarded as a reflection of
remains under repairs and it is expected that the shrinking investments in the Nigerian oil and gas
repair work may continue until September. A subsea sector.
hose at the Forcados terminal has been severely Since the month of June, the 180,000 barrel a day
damaged and this has contributed to supply flow TNP has stopped transporting oil as a result of the
shortages, which resulted in a significant reduction alarming issue of oil theft. To make matters worse,
of crude oil exports from the terminal. shipments that were scheduled to resume in the
It is estimated that the Forcados terminal curtailed month of October in Brass, where a force majeure
supply of crude oil, and the shortage to supply was as has been in place since July, according to a new
much as 260,000 barrels. The closure of the facility report by Bloomberg. It was discovered that the
was as a result of the reports of a ‘sheen’ within the amount of oil reaching the terminal had reduced
close proximity of the terminal. So far, some of the significantly as a result of oil pipeline vandalism and
facilities in the premises have been negatively illegal bunkering.
affected by it. The Forcados terminal is currently In the month of March, the minister of state for
operated by the Shell Petroleum Company (SPDC). petroleum had mentioned that poor investments in
The Forcados terminal is not the only one that has the oil and gas sector as well as the exit of some
been grounded, the Bonny terminal has also been multinational oil producing companies were severely
affected, as a result of the force majeure the facility affecting Nigeria’s ability to meet the oil production
has also been shut down. So far, the loss from the quota.
terminal is estimated to be 3.6 million barrels in the Furthermore, he was quick to suggest that the
month of July alone. The Nigerian petroleum sector security challenges in the oil and gas sector was
has been severely affected by oil theft, pipeline another reason that the sector was not experiencing
vandalism and all efforts by the government, and any significant growth. Again more recently, the
security agencies to address the problem are yet to drive addressing concerns for climate change, and
receive any meaningful results. the surge in interest in renewable energy by climate
Many oil industry operators in the industry have change enthusiasts have further reduced
complained about the fact that they received less investments and funding for the industry.

Nigeria 7