Ejiofor Alike
The federal government and Shell Nigeria Exploration and Production Company Limited (SNEPCo) have lost about $250 million since March 4, when the oil giant commenced the turnaround maintenance of the Bonga deepwater oilfield, where statutory activities are being executed to ensure continuous optimum operations at the field.
THISDAY’s investigation revealed that the 225,000 barrels per day capacity oilfield was producing about 150,000 barrels per day before it was shut down.
A source close to the deepwater facility told THISDAY on condition of anonymity at the weekend that apart from the cost of the maintenance, which runs into millions of dollars, the oil giant and the Nigerian government have lost about $250 million oil revenues as a result of the closure of the production facility.
“Oil production is deferred as a result of the current exercise. That means that about $250 million of oil revenue has been deferred as well based on oil price of $50 per barrel. But this is not actually a loss because it is not stolen crude. It is deferred and this means that the revenue, which should have been earned now, will be earned in the future because the crude is still in the ground,” he explained.
A major focus of the maintenance is the Bonga Floating, Production, Storage and Offloading (FPSO) vessel, which is at the heart of Bonga operations.
The turnaround maintenance involves inspections, recertification, testing and repair of equipment as well as engineering upgrades with Nigerian companies and subsea professional playing key roles.
The Managing Director of SNEPCo, Mr. Bayo Ojulari has said that Nigerian companies are playing key roles in the turnaround maintenance .
Ojulari said nearly all the bolts and nuts as well as fabrications used for the exercise are made -in-Nigeria, marking a turning point in SNEPCo’ s efforts to encourage Nigerian content development.
“This is an operation safely in Nigerian hands, with Nigerian engineers and companies playing leading roles and ensuring the objectives of the exercise are achieved,” he added.
The turnaround maintenance involves three major components – statutory and regulatory safety checks, inspections, repairs and replacement of equipment and upgrades – to ensure safety, optimum production, availability and reliability. It is also part of the base case design of the FPSO to carry out TAM on every 30 months basis.
“The plan is to successfully conclude the ramp of activities and resume production as planned in April, 2017. It is not proper to interpret the period as production loss to Nigeria. Rather, the turnaround maintenance is a series of planned and controlled activities that are implemented in collaboration with government and other stakeholders – with the aim of ensuring the continued safety and productivity of the facility. The planning started two years ago and safety is top priority in every stage of the activities,” Ojulari added.
The turnaround maintenance is the fourth since Bonga began production in 2005.
Bonga, which won the ‘Asset of the Year’ Award 2016 in the Shell Group, is Nigeria’s first deep water development in depths of more than 1,000 metres, and is located 120 kilometres offshore Nigeria.
SNEPCo operates Bonga in partnership with Esso Exploration and Production Nigeria (Deep Water) Limited, Total E&P Nigeria Limited and Nigerian Agip Exploration Limited under a Production Sharing Contract with the Nigerian National Petroleum Corporation (NNPC).
The routine maintenance has taken off a significant chunk from Nigeria’s crude oil exports.
SNEPCo operates Bonga under Production Sharing Contract (PSC) for the Nigerian National Petroleum Corporation (NNPC).
Bonga FPSO has the capacity to produce 150 million standard cubic feet of gas per day.
