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Shell to resume crude oil export at Forcados month end

By Clara Nwachukwu

The Shell Petroleum Development Company of Nigeria Limited (SPDC), today hinted that its Forcados Oil Terminal will resume export operations by the end of the month when it expects on-going essential repairs would have been completed.

Recall that Shell had declared a force majeure on the Forcados Oil Terminal Offtake Programme, due to integrity compromise through constant oil theft, which it said poses an “existential threat”.

SPDC’s Media Relations Manager, Abimbola Essien-Nelson, in a statement today, said: “In addition to the repairs, we are working to remove and clamp theft points on the onshore pipelines to ensure full crude oil receipt at the terminal.”

According to Essien-Nelson, the active illegal connections to SPDC joint venture’s production lines and facilities in western Niger Delta as well as the inactive illegal connection to the onshore section of the 48” Forcados Export Line are in the company’s on-going programme to remove illegal connections on the pipelines that feed the terminal.

She said: “SPDC gives priority to the removal of active illegal connections and to illegal connection points that have leaks. This scheduled programme is continuous as new illegal connections are identified during surveillance of the pipelines.

“An example of such illegal connection is on the onshore section of the 48” Forcados Export Line, which is currently not active and has no sign of leak at the interconnection point.”

Global research and consultancy group, Wood Mackenzie (WoodMac), the terminal has an oil export capacity of 400,000 barrels per (bpd).

It described the Forcados Oil Pipeline System as “the second largest network in the Niger Delta, and transports oil, water and associated gas from fields in the western delta to the Forcados oil terminal.

“The Trans Forcados Pipeline (TFP) is the major trunk line, into which feed multiple branches from onshore fields. At the Forcados River manifold, its capacity is 850,000 b/d,” and was hitherto by Shell until 2012.

Meanwhile, Essien-Nelson reiterated SPDC’s commitment to running its assets safely, reliably and in accordance with globally accepted standards.

“SPDC continues to work tirelessly, alongside government and partners, towards the eradication of crude theft from its infrastructure,” she said.

SPDC gives priority to the removal of active illegal connections and to illegal connection points that have leaks. This scheduled programme is continuous as new illegal connections are identified during surveillance of the pipelines.

Oil production, export

Nigeria’s oil exports have been at their lowest levels in 25 years due to incessant oil theft.

In September, the Nigerian National Petroleum Company (NNPC) Limited, which is in joint venture with SPDC, announced that the country was losing 470,000 bpd of crude oil, the equivalent of $700 million monthly to oil theft.

The Organisation of the Petroleum Exporting Countries (OPEC) in its September report indicated Nigeria’s inability to meet its crude oil production quota of 1.826 million bpd, as it produced a paltry 927,000 bpd in August.

Confirming the development, the National Upstream Petroleum Regulatory Commission (NUPRC), said crude oil production fell month-on-month by 11.47% to 0.972mbpd in August from 1.08mbpd in July 2022.

The persistent decline, which has been largely attributed to crude oil pipeline vandalism and theft, continues to constitute a critical financial strain on the Federal Government’s budget implementation, as oil proceeds account for 80% of its revenue and foreign exchange earnings.

Last week, the Central Bank of Nigeria (CBN) foreign reserves declined by 5.47% to $38.28 billion, the lowest in one year thereby increasing pressure on the Naira at the foreign exchange market.

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