Attack in Niger Delta still causes disruptions, says Shell
By Despite increase in oil output, Nigeria’s biggest International Oil Company (IOC) in terms of asset and production, Shell, says persistent attacks in Niger Delta continue to halt its output.
According to the Shell’s general manager for external relations, Igo Weli, security in parts of the Niger Delta remains a major concern with persisting incidents of criminality, kidnapping and vandalism occurring both on its onshore and offshore installations.
“Facilities operated by both indigenous and international oil companies continue to be vandalized by attacks and other illegal activities such as crude-oil theft,” Weli said.
Shell declared force majeure on Bonny Light crude shipments last month following pipeline leaks, while loadings of Forcados exports were also delayed, although Weli didn’t specifically link those incidents to his comments on vandalism.
“We are continuing to monitor the situation to mitigate any exposure and minimize risks faced by our personnel,” Weli told Bloomberg.
Militant assaults on Nigeria’s oil infrastructure in 2016 cut the country’s output to less than 1.4 million barrels a day, the lowest in 27 years. While there hasn’t been a major attack since, the security situation in the oil region remains fluid, according to Weli.
“Recently, exports via the TFS have been shut following leakages. Following our conversations with the firm we expect exports via the TFS to resume within a fortnight. We understand that these leakages are due to the age of the TFS rather than by vandalism,”
The Trans-Forcados pipeline which transports about 200,000 to 240,000 barrels of crude per day, is the major trunk line in the Forcados Pipeline System. It is also the second largest network in the Niger Delta after the Bonny Oil Pipeline System.
Some of the companies affected by the shutdown include the Nigerian Petroleum Development Company (NPDC), Seplat Petroleum Development Company Plc, Shoreline Natural Resources, among others.
Seplat Petroleum Development Company’s (Seplat) Q1 2018 results were boosted by strong oil revenues which rose 534 percent y/y to $141m underscoring the importance of the pipeline.
According to a review of Seplat Petroleum Dev Company Q4 2017 and Q1 2018 results done by FBNQuest Capital, sent to BusinessDay, the firm confirms this through conversations with the company.
Nigeria is scheduled to load at least 1.8 million barrels a day next month. That equals the production cap it agreed on with the Organization of Petroleum Exporting Countries, which took effect in January.
Meanwhile Shell says it is committed to further unlocking Nigeria’s deep-water resources and along with its co-venture and government partners is evaluating opportunities to further increase production of the Bonga field in an efficient and cost-effective way.
One such opportunity is the Bonga South West/ Aparo (BSWA) Project. In June 2017 SNEPCo, a subsidiary of Shell organised multi-stakeholder local content workshops on the potential opportunities the project may bring to Nigerian service providers. This was in fulfilment of mandatory requirements by the Nigeria Content Development and Monitoring Board. A decision on progressing the BSWA project is currently being awaited.
SNEPCo is also a co-venture partner in the Erha field, which is operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited. Located 140 km offshore in the Gulf of Guinea at water depths of between 1,200 and 1,800 metres, production commenced in 2006. The Erha FPSO has a production capacity of 210,000 barrels of oil per day. In recent years, the field has expanded production with both the North Phase 2 and 3 projects coming on stream ahead of schedule in 2015 and 2017 respectively.
DIPO OLADEHINDE
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