• Wednesday, November 29, 2023
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NNPC, others lose $933m to production shut-ins in June

Oil firms to import own petrol as NNPC halts controversial crude oil swap that gained notoriety

The Nigerian National Petroleum Company Limited (NNPC) and other oil companies operating in the Niger Delta lost over $933 million in June owing to production shut-ins, a report by the corporation shows.

These production shut-ins were caused by the declaration of force majeure, fire outbreaks, industrial strike actions, and an increase in oil theft, according to the NNPC’s latest presentation to Federation Accounts Allocation Committee (FAAC).

Oil companies lost 7.6 million barrels of crude oil worth about $933 million, based on June’s average Brent price of $122.71 per barrel, BusinessDay analysis shows. Analysts say this partly explains investor apathy towards the nation’s oil and gas sector.

Forcados terminal lost 258,000 barrels per day (bpd) due to fault in the terminal, with Shell Petroleum Development Company (SPDC) requesting all injectors to curtail production into Forcados.

The Qua Iboe terminal lost 1.5 million bpd due to a seven-day warning strike action embarked upon by Petroleum and Natural Gas Senior Staff Association of Nigeria to protest Mobil Oil Producing Nigeria’s divestment of assets without notification.

“Crude oil production at Bonny terminal dropped significantly to an average of about 3 mpd since the 21 of March 2022 till date (June),” the report said. “The terminal operator has declared force majeure on all outstanding Bonny programmes.”

The Bonga terminal lost 558,085bpd due to flex work ongoing which requires that the Floating Production Storage and Offloading be kept at 16 metre draft to facilitate the repair work.

The Yoho terminal encountered challenges with the commissioning and had to take a shutdown to curtail flaring until the terminal is back up.

Towards the last week of June, the Erha terminal saw production shut-ins due to plant repairs.

A fire incident was reported at Ukpokiti Terminal, while another interruption was reported at Aje fields, leading to a shut-in of operations and the loss of 11,000bpd.

Last month, the NNPC said it will adopt Saudi Aramco’s model of using video surveillance to monitor its pipelines carrying crude oil from wells to flow stations in the Niger Delta, to support production.