Power outage at Bonga oil terminal costs NNPC, partners $64m

Due to power outage, the Nigerian National Petroleum Corporation (NNPC) and its other major partners lost one million barrels of crude oil worth about $64million in Bonga terminal, Nigeria’s first deepwater export terminal.

Bonga is the largest deep-water project to commence production in Nigeria with a storage capacity of 2 million barrels, a maximum loading rate of 47,000 barrels per hour and is designed to produce up to 225,000 barrels of crude oil per day.

In a document NNPC presented to the Federation Account Allocation Committee (FAAC) meeting for last month, the state-owned oil corporation said power outage in February resulted in a shutdown of one million barrels of crude oil in the Bonga oil field.

The above development means NNPC and its co-venture partners (Shell 55%, Esso 20%, Total 12.5%, Agip 12.5%) lost about $64 million, based on the February 2021 average Brent price of $62.

“Power outages in Nigeria are common, but an outage on an oil field with international partners resulting in a loss of 0ne million barrels is unusual,” Charles Akinbobola, an analyst at Sofidam Capital said.

He noted that loss means a temporary setback to Nigeria’s oil revenue especially in an era when the global oil market is gradually rebounding.

“Any shutdown on any of Nigeria’s exporting terminals is a financial loss to the government,” Akinbobola noted.

Aside from the Bonga oil field, 17 of the country’s terminals had one issue or the other leading to shut-ins that cost Nigeria 4.105 million barrels of crude oil in February.

In Forcados, the injection into the facility was curtailed due to repairs at Otegbele, Eresigbere and Chanomi between6 February 2 and 7, wherein 360,000 barrels of oil were lost.

Also, receipts were curtailed at the same terminal due to leaks observed along with the system and subsequent repairs of the Trans Forcados pipeline in which another 360,000 barrels were shut in between February 18 and 23.

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Also, at the Akpo facility, there was production confinement of 60,000 barrels on the 25th of the same month, while at the Abo terminal, about 400,000 barrels of crude oil was lost due to the outbreak of the COVID-19.

The Amenam terminal was shut down from 25 to 28 of February, to rev up compliance with the production quota imposed on members by the Organisation of the Exporting Countries (OPEC), and 56,000 barrels were lost cumulatively.

The NNPC document indicated that Erha experienced deferred production and later complete shutdown for the repair of an epoxy (coated) pipe between February 26 and 28, causing a loss of 210, 000 barrels.

Escravos suffered a 252,000 barrels’ loss as a result of routine maintenance shutdown, while Addax Petroleum’s production into Brass and Seplat’s 28,000 barrels, as well as 15,000 barrels, were curtailed due to a strike embarked upon by workers of the NAOC in Ebocha and what the corporation described as a third party interference, respectively.

According to the NNPC, Egina came second in the month’s losses with a princely 600,000 barrels between February 1 and 6 due to pigging (use of pipeline maintenance gauges) activities, while Aiteo closed some wells due to flowline leak, resulting in the loss of 560,000 barrels of the commodity.

In Bonny, Ohaji was shut down due to a leak on the Egbema/Asa trunkline between February 20th and 22nd of the same month and 30,000 barrels were lost to the development.

While Pennington lost 50,000 barrels cumulatively due to vessel swap and chain adjustment, Ebok had 69,000 barrels of its productive shut in also due to pigging activities.

The story was not different for Tulja which had its production disrupted for maintenance purposes, leading to a loss of 27,000 barrels, while Ima experienced a controlled shutdown for maintenance, losing 28, 000 barrels in 28 days in the process.

For a summary of receipts due in March, the NNPC document, which was signed by the corporation’s chief financial officer, Bello Abdullahi, noted that gross revenue for Joint Venture (JV) crude was N178.3 billion, while JV gas stood at N35.8 billion and the Production Sharing Contract (PSC) was N2.45 billion.