Production shut-ins cost Nigeria $1.6 billion in losses
Vandalism and theft has lost Nigeria billions in revenue.
The Nigerian National Petroleum Corporation (NNPC) in its financial report for the month of October 2017, released on Wednesday, January 3, 2018, said the Bonny oil terminal was affected by the leaks on the Nembe Creek Trunk Line. It also explained that a Force Majeure was declared in September 2017 and remained in place until October 17th where about 120,000bopd was shut-in for 16 days while it lasted.
At the Qua Iboe terminal, NNPC said about 195,000 bopd remained shut-in for the entire month of October because of slow recoveries from some wells and repairs on the export line and fuel gas line.
"The Bonga Terminal Production also dropped for eight days due to the shut-in of some wells as a result of a request from NLNG for Akpo to cut off gas export due to operational issues. The production shut-in was 61,000bopd. Another 83,000bbls of production was also shut-in for a day due to intervention and preventive maintenance. The Trans Forcados Pipeline was shut down for eight days from due to leaks in the Oteghele and Yeye axis with the loss of approximately 200,000bopd of production."
Based on current Brent crude oil price of $67.51 per barrel, Nigeria lost $45.381million per day (N16.337 million) or N490.11 billion in a one month.
The Corporation also added that product theft and vandalism have continued to destroy value and put NNPC at a disadvantaged competitive position. It disclosed that a total of 970 vandalized points were recorded between October 2016 and October 2017.
However, NNPC said contribution from crude oil amounted to $227.66million, while gas and miscellaneous receipt stood at $49.09million and $0.76million respectively. NNPC also said the export receipts of $121.75million was remitted to Federation Account, while $155.76 million was remitted to fund the Joint Venture cost recovery for October 2017, to guarantee current and future productions.
As a result, the NNPC attributed the poor performance of the oil and gas sector during the period under review to these challenges. Despite the losses, the country earned an excess of $3.35 billion (N1.206 trillion) from oil and gas export from October 2016 to October 2017.
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