Nigerian Oil Production Soars

Nigeria’s crude oil export has recorded a major boost as Shell Petroleum Development Company (SPDC) has lifted force majeure on about 300,000 barrels per day of Bonny Light crude, which it declared on loadings for June and July 2011.

With the lifting of the force majeure, Nigeria’s total production capacity, including condensate, stands at about 2.6 million barrels per day.

Bonny crude is a light, low sulphur grade used by the United States East Coast refiners to produce petroleum products.

Shell did not disclose the volume of crude oil affected by the earlier force majeure but the US East Coast imported 322,000 barrels per day of Bonny Light from Nigeria in March 2011, representing about 32 per cent of total imports to the region, according to a recent data by the US Energy Department.

Also, Shell’s earlier loading schedules showed that 10 cargoes of Bonny Light of about 950,000 barrels each were shipped in May 2011, totalling over 300,000 barrels of crude per day.

However, following the operational problems Shell was said to have experienced at the 400,000 barrels per day capacity Bonny Export Terminal, the company had planned to revise exports of Bonny Light for June and July to eight and nine cargoes respectively, translating to over 250, 000 barrels per day.

Last month’s declaration of the force majeure on Bonny Light export, which frees the oil giant from all contractual obligations to its customers due to unforeseen circumstances, followed what it called “production cutbacks” caused by leaks and fires on the company’s Trans Niger Pipeline (TNP).

Confirming the lifting of the force majeure, Shell’s spokesman, Mr. Precious Okolobo, said on Wednesday that the oil giant had resumed full export of Bonny Light.

“The force majeure has been lifted,” he said, without giving further details.

Shell had in a statement attributed the force majeure, which came into effect on June 13, 2011, to multiple fires on the company’s TNP.

According to the company, joint investigation visits comprising government agencies, communities and SPDC found that the incidents were caused by hacksaw cuts which indicate third party interference and activities of unknown persons.

“The leaks have been repaired leading to resumption of production on June 12. The TNP which transports production from SPDC and third parties in its Eastern operations to Bonny Terminal, was affected by leaks and five separate fire incidents on both the 24′ and 28′ lines in Bodo, Bera, Biera and Mogho all in Ogoni land, on June 9. SPDC immediately shut the lines, mobilised its pipelines response and fire fighting teams and extinguished the fires by June 11,” the statement said.

The company also said the production deferment over the period had affected the loading programme at Bonny Export Terminal, pledging to advise its customers of a revised schedule.

Vice-President, HSE, Infrastructure & Logistics, Shell Sub-Saharan Africa, Babs Omotowa, had said the leaks and fires were indication of a worrying trend, not only on the TNP, but also on the company’s facilities in other places.

“Sadly, the trend is continuing unabated. At the end of April, we recorded more than 35 sabotage spills. SPDC is continuing to upgrade facilities, replace pipelines and improve oil spill response systems. But no matter how much we improve our performance, until the activities of oil thieves and illegal refiners are brought to an end, the vast majority of oil spills in the Niger Delta will continue,” Omotowa said.