Oil & Gas
By Anthony Isibor
THE Senate Ad hoc Committee on Petroleum Resources, Upstream, has said that only 66 percent of Nigeria’s oil production can be effectively guaranteed due to crude oil theft, pipeline vandalism, inadequate investments, host community issues, and OPEC restrictions.
According to the findings of the committee, which was set up to investigate the remote and immediate causes of crude oil losses and the impact on production and revenue, with a view to finding a solution to the menace, the country is estimated to have lost over $2 billion to oil theft between January and August 2022.
The findings also showed that the country’s average technically allowable rate of oil and condensate production stands at 1,907,493 bopd, and 324,624 bopd, respectively and amounting to a total production of 2,232,117 bopd.
However, the country’s OPEC crude quota for the months of August/September 2022 was 1,826,000 bopd only and the country was yet unable to meet up with its quota between January and July, 2022 due to pipeline vandalism/theft, which resulted in major shut-in of well/fields, especially along the Bonny/Brass Terminal network.
The report also showed that the average daily production for oil and condensate stands at, – 985,633 bopd, and – 246,597 bopd, amounting to a total of – 1,232,430 bopd, while the average daily production for gas stands at: (Associated Gas – 4.352 bscf/d; – 61.9%, (Non Associated Gas – 2.79 bscf/d; -38.1 %, a total of – 7.31 Bscf/d.
The production by terrain are as follows:
Deep Offshore – 37%
Shallow offshore – 29%
Swamp – 12%
Land – 21%
As could be seen and established, only 66% of the country’s oil production can be effectively guaranteed, while 33% is affected by oil theft and loss in production due to the third party easy access on land terrain.
The short fall in production (including condensates) is mainly from Onshore/Swamp fields that are affected by pipeline sabotage/theft.
The affected oil companies are therefore forced to shut-in production, since the bulk of what is produced is not received at the Export Terminal due to rampant cases of third-party interferences/illegal connections on the pipelines leading to huge production losses over the years.
The report also stated that these shut-in wells have seriously affected the gas supply to Nigeria Liquefied Natural Gas (NLNG) by 30% to 40% since most of the produced gas are associated with crude production.
“Bonny Terminal, which used to export nine (9) tankers of 1 million barrels/month has not witnessed any export since 10th April, 2022, which is quite unfortunate.
“Oil and Gas producers using the Bonny export terminal at some point resorted to barging the products (crude) for export but was rejected by the NNPC in order to safeguard the huge investment made on the terminal and prevent the “balkanization” of Bonny light crude grade.
“Heirs Holdings Oil and Gas (operators of Agbada field) has not exported a barrel of crude since April 2022. Since its only evacuation source is through the Trans Nigeria Pipeline (TNP) to Bonny terminal,” the report said.
It stated also that the losses which occurred due to shrinkage and pipeline technical losses were insignificant.
The committee also commended the efforts of security agencies, which it said, led to the seizure and arrest of 11 crude oil Vessels, 30 speed boats, 179 wooden boats, 37 trucks as well as 122 arrested suspects of crude oil theft between April and September 2022.
“Also 959 metal tanks, 737 Ovens, 452 dugout Pits, 342 Reservoirs, and 355 Cooking Pots were destroyed. Also 207 pumping machines, 12 sophisticated Welding Machines, 6 power Generators and 2 Automatic Filling Machines were recovered.
“NNPC in collaboration with both industry regulators, other partners and government security agencies has deployed security architecture to help restore / guarantee production in eastern, central and western production corridors.
“On a monthly basis, there is reconciliation between the various well heads and flow station measurement to ascertain reservoir performance management and between flow station and terminal measurement to determine actual losses, which form the basis for estimating crude oil theft,” it said
The 13-member committee had Senators Albert B. Akpan as Chairman, and Yusuf A. Yusuf, Solomon O. Adeola, Kabiru I. Gaya, Mohammed A. Adamu, George T. Sekibo, Gabriel T. Suswam, Kashim Shettima, Aliyu S. Abdullahi, Mohammed A. Ndume, Stella A. Oduah, Mohammed S. Musa and Ibrahim A. Gobir as members.
KN
Tags: Anthony Isibor OPEC
