Nigeria Loses 300,000bpd to Attack on Forcados Pipeline

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  •  Loss erodes country’s gains from oil price rise

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Nigeria is losing about 300,000 barrels of crude oil per day due to the bombing of Forcados pipeline that conveys Forcados grade of crude oil to the over 400,000 barrels per day Forcados Export Terminal, one of the country’s biggest export terminals in the Western Niger Delta, THISDAY’s investigation has revealed.

The loss, which translates to an average of $12 million daily at an oil price of $40 per barrel, arose from the damage caused on the 48-inch underwater pipeline, which disrupted crude oil flows to the export terminal.

It was also gathered that the loss may have eroded the gains Nigeria would have derived from the recent rise in oil price.
The affected Trans-Forcados Pipeline, which is operated by Shell Petroleum Development Company of Nigeria Limited (SPDC), belongs to the Nigerian Petroleum Development Company (NPDC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

THISDAY gathered that Shell, Seplat Petroleum Development Company Plc, Shoreline Resources Limited, Neconde, First Hydrocarbon Nigeria (FHN) and NPDC are some of the companies operating in the western Niger Delta that convey their crude oil through the pipeline.
Investigation also revealed that some marginal field producers such as Pillar Oil, Midwestern Oil and Gas, Platform Petroleum and Energia also convey their crude oil through the pipeline

However, it was learnt that these marginal field producers have another alternative route through the pipelines operated by the Nigerian Agip Oil Company (NAOC) to carry their crude oil to Brass Export Terminal.
THISDAY also learnt that Seplat had built alternative pipeline to supply crude oil from its western Niger Delta operation to the Warri Refinery but still uses the Forcados pipeline.

The Chief Executive Officer of Seplat, Mr. Austin Avuru, had told THISDAY in an interview that the persistent shutdown of the pipeline was a major problem the oil producers operating in the western Niger Delta.

“Once Trans Forcados is down, all of us suffer….So, the Trans Forcados remains a huge problem for all of us, producers in the western Niger Delta, who deliver crude oil to Forcados. When it is down, everybody suffers; we have production outage and therefore, for the period, there is no production for the country,” Avuru had told THISDAY

The closure of the oil pipeline, which also accounts for 40-50 per cent of the country’s gas production, may have also led to the current drop in power generation by over 1,000 megawatts, THISDAY has learnt.

The pipeline is a crude oil facility, but the gas and liquid condensates produced from gas fields the western Niger Delta are evacuated through the pipeline, hence its closure has also affected the supply of gas to the power stations.

Shell had on February 21, 2016 declared force majeure on Forcados liftings effective 1500hrs (Nigerian time), following the disruption in production caused by the spill on the Forcados Terminal subsea crude oil export pipeline.

The company also intensified efforts on containment and oil recovery from the February 14, 2016, spill, while also finalising repair plans, which the Minister of State for Petroleum, Dr. Ibe Kachikwu, said could take up to May 2016 to complete.
The minister also added that Nigeria was producing 2.3 million barrels per day before the incident.

“Supported by industry group Clean Nigeria Associates (CNA) and other oil companies, SPDC has deployed specialised equipment to contain the spill. SPDC has also mobilised clean-up teams and contracted a specialised aircraft to join in the response. Production into the terminal and crude oil exports were stopped soon after the spill was discovered,” Shell had said in a statement.

According to Shell, diving teams which inspected the export pipeline reported extensive damage that was consistent with the application of external force, an indication that it was a sabotage.

  • The Analyst

    Result of purposeless chase of an ex militant.
    Wonder what Buhari’s advisers told him?

    That community was were the militancy started as Ijaw versus Ishekiri. It took years of negotiation and intervention by successive government to restore peace in that place.
    Why going to heat up the cold gun powder drum?
    $12m per day loss.
    If one Tompolo = $1M
    it means we capture 12 Tompolo’s per day….
    By now, we should have gotten the country rid of all Tompolos!
    Senseless move in the name of Anti corruption. Stack Stupidity. No business Sense.

    • Dejandon

      Your thought set is really malfunctioning. So criminals should be allowed freedom just because the oil pipe needs to be protected? When your Tompolo is finally caught, he will sing like canary bird. But he must not feign any illness and ask to be allowed to fly overseas for treatment

      • The Analyst

        Do you burn your house when you are looking for a rat?
        You either use rat poison or Rat Trap.
        No one said Tompolo should be let off the hooks.
        What I have said is that it should not be by loosing 30% of Nigeria’s income, especially at this very tough period.
        Nigeria exports about 1.2M barrels of crude daily and this incident has taken away 300,000 barrels. Worst part is that it will take about 3 months to repair!
        All I am saying is that no smart person will make such a mistake!
        Tompolo is too small a fly to waste our resources…
        There are many other ways to kill a rat.
        The method applied by our President lacks wisdom and to buttress my point, watch out, he will backtrack from his Tompolo hunt.

        • Jon West

          You have to have business sense to think the way you do. Unfortunately, the Certificateless One and his mostly business illiterate minions, cannot appreciate your arguments. Why waste your time on them. Let them eat darkness, heat and poverty.

  • Olumide Soneye

    Tompolo