Iconic Forcados may be up for sale

The Forcados Oil Terminal is one of Nigeria’s largest crude grades with an average output of about 200,000 barrels a day last year.

Shell Petroleum Development Company owner and operator was the biggest oil company that shipped through Forcados Terminal, until about 2010 when it began a divestment campaign.

Sources say the terminal may now be up for sale as a series of militant attacks and general divestments from onshore assets by Shell and other oil majors make the terminal less attractive for Shell.

In the last five years, Shell has shrunk to a fringe exporter in the Niger Delta west and Forcados (which it still operates); with mainly Nigerian owned independents now the major exporters through Forcados.

The Forcados terminal has been repeatedly disrupted by militant attacks in the Niger Delta region.

So who would be a major contender for Forcados?

One name that jumps out is Nigerian oil producer Seplat.

Seplat recently said that the Trans Forcados pipeline, which was shut most of last year due to damage from militant attacks, is likely to resume production towards the end of second quarter of 2017.

The terminal currently accounts for 90 percent of Seplat estimated 75,000 bpd oil and gas production.

The closure of Forcados since last year severely affected Seplat’s production output which dropped to 34 percent year on year for the nine months period ended September 2016 compared to the corresponding period of 2015 to 26, 233 barrels per day.

Crude oil revenue was $125 million, a 66 percent drop from 2015 figures. The company also reported a 9 month loss of about $97.7 million.

The return of Forcados should improve the earnings of the indigenous oil firms and enable them service their debts.

More importantly ownership of Forcados by an indigenous Nigerian oil and gas firm with experience in managing community relations/ agitations in the Niger Delta, may be a win-win for the country and the new buyers/owners if such a deal were to materialise.