Forcados Oil Back On Stream After Militant Attacks

Nigeria’s Forcados Crude oil loading facility came back on stream at the weekend, some 14 months after it was damaged by Niger Delta militants.

The Chief Executive Officer of Shoreline Natural Resources, Dr Ladi Bada told Channels Television that loading resumes at the Delta State platform, after repairs cost an estimated 100 million U.S. dollars, and a total revenue loss north of 2 billion dollars.

Early on Wednesday, Royal Dutch Shell the owner and operator of the main Forcados Oil terminal said it has lifted force majeure on the facility that has capacity for nearly 250,000 barrels of oil per day.

Forcados facility was repaired last October, but could not be operated as militants threatened they would blow it up again.

Last week, shell issued a loading programme for June, with Forcados’ resumption raising Nigeria’s total exports to at least a 15-month high.

Nigeria Faces Likely Oil Output Drop As Exxon Suspends Exports

Gas-flaring_Niger-delta_NigeriaU.S. oil major, Exxon Mobil Corp, says it has suspended exports from Nigeria’s top crude stream.

The suspension has added to economic strains from renewed activities of militants in the Niger Delta region that have cut production to its lowest in decades.

Reuters quoted Exxon Mobil as saying on Friday that it had declared a force majeure – a suspension of deliveries because of events beyond its control – on Nigeria’s Qua Iboe crude oil grade BFO-QUA, and that a portion of production had been curtailed after a drilling rig damaged a pipeline.

Last week, Chevron’s platform in the Delta was attacked by militants.

The outages adds to production problems at two of the other largest crude streams, Bonny Light and Forcados, which have already taken Nigeria’s output to a 22-year low.

Royal Dutch Shell shut a major pipeline earlier this week and declared force majeure on Bonny Light crude exports on Wednesday, while an attack in February on a pipeline also caused it to shut the 250,000 barrels per day Forcados export terminal.

Nigeria’s oil production has fallen to 1.65 million barrels per day (bpd) due to militant attacks, Finance Minister Kemi Adeosun, said on Friday, from 2.2 million bpd.

According to Reuters calculations, if outages at Qua Iboe and other streams are prolonged, Nigerian output could fall to around 1.2 million bpd.

This would be the lowest output since 1970, according to BP’s statistical review.

Nigeria had been Africa’s largest crude exporter with its economy heavily reliant on oil up until this year, when rampant oil theft and corruption has kept production well below capacity.

As a result, Angola has overtaken Nigeria as the continent’s largest producer since March, according to OPEC figures.

Navy Intercepts Boats Carrying Suspected Refined Automotive Gas Oil

Navy-arrest-oil-thievesNigerian Navy has intercepted two Sea Going Cotonou boats with 10 crew members, carrying 195 metric tonnes of suspected illegally refined Automotive Gas Oil (AGO).

Commanding officer of the Nigerian Navy Ship Delta (NNS Delta), Commodore Raimi Mohammed, who addressed reporters at the base’s headquarter in Warri, Delta State, restated the position of the Central Naval Command to rid the maritime environment of oil vandals, kidnapping and other nefarious activities.

Commodore Mohammed also debunked allegations of a Joint Task Force ban on the use of 200 horse power engine boats by individuals.

The NNS Delta also arrested a suspected kidnapper at the Ndoro camp in Bayelsa State.

Navy intercepts stolen refined oil
Tanks with refined Automotive Gas Oil

Commodore Mohammed said: “The patrol team of NNS Delta on April 23 arrested the boats at Forcados entrance going to sea with product totalling over 150 metric tonnes suspected to be illegally refined AGO”.

On the increase in kidnap cases, he also expressed worries that persons previously involved in crude oil theft and other illegal oil activities had switched over to kidnapping.

“Because they are feeling the heat of our patrol and operations, they are abandoning it and going to something else,” he stated.

He told Channels Television that the Navy had started operations against hijackers and had intensified patrols in areas of operations to tackle oil pipeline vandals in line with the directive of the Chief of Naval Staff.

FG Wants Damaged Forcados Terminal Fixed To Boost Power

Prof Yemi Osinbajo on Forcados damaged terminal The Nigerian government has called for an expedited repair of the Forcados Export Terminal operated by Shell, and the activation of an alternative process to ameliorate the gas supply deficit and boost power.

Vice President Yemi Osinbajo told officials of the Nigerian National Petroleum Corporation (NNPC) and Shell in Forcados, Delta State, that President Muhammadu Buhari was concerned about the damage done to the terminal in February.

He said that his visit was to assess the situation which he claimed was responsible for the recent drop in electricity supply.

The damage had brought loss of gas supply to power plants and significant loss of potential revenue.

Professor Osinbajo said that the president was equally concerned that the gas projects under the disposal of Shell meant to beef up domestic supply of gas in Nigeria needed to be speedily completed.

‘A Real Problem’

The Vice president, who met on Friday with top officials of Shell that runs the terminal and senior NNPC officials after they flew over the location of the terminal, told the officials that “what is going on here affects the Nigerian people and the economy,” referring to the loss of gas supply to power plants and the loss of potential foreign exchange earning arising from the inability to produce over 250,000 barrels of oil per day, due to the damage done to the terminal.

“The damage done to Forcados affects our oil earnings but also as important is the power aspect. It (Forcados) is a major source of gas. About 40% of our gas supply is affected leading to the problem of power supply in the country,” the Vice President told Shell officials led by Country Chairperson, Mr Osagie Okunbor and NNPC officials led by the Chief Operating Officer for Upstream, Mr Bello Rabiu.

Professor Osinbajo said that at a point few months ago power supply in Nigeria had peaked at an unprecedented 5000 megawatts, but now has dropped significantly including instances of system collapses, showing that the Forcados damage was “a real problem.”

He said: “I came here on the instruction of the President who is concerned about the damage done to Forcados. I came here to see for myself and underscore the great implication for the nation’s economy. Many people don’t even know that power supply is hampered by what is going on here”.

While expressing gladness at the seriousness of purpose he observed from the plans drawn up by Shell and the NNPC, the Vice President asked Shell to do “whatever else can be done and do it as expeditiously as possible,” to repair the damaged terminal.

Repair Plan

A repair plan presented to the Vice President during the visit by Shell indicated that the repair work, which is in three phases, is about concluding its first phase with expectation that the repair would be concluded in May. Meanwhile, the NNPC also presented an interim alternative plan to supply gas to the plants including trucking condensate.

The Vice President further expressed the concern of the Federal Government that IOCs that seat on 80% of gas deposits had not been as forthcoming regarding gas supply to the domestic market.

Professor Osinbajo encouraged the IOCs to do a lot more for domestic gas supply considering the gas supply problems in Nigeria, stressing that “we are clearly suffering in terms of domestic supply”.

He stressed the need for Shell to speedily complete the Bonga and Forcados/Yokri gas projects in order to assuage the plight of the Nigerian people.

According to him, “the president is particularly concerned about this outstanding gas projects”.

The Bonga Gas Diversion project would provide 120 million of standard cubic feet (mmscf) per day when completed by the second quarter of this year, while the Forcados/Yokri gas project would provide 80 million of standard cubic feet per day at completion expected at the same timeline. There is also the Assa North/Ohaji South project which can also provide 500 million of standard cubic feet per day.

Experts say currently, gas production into domestic network in Nigeria had fallen to 601mmscf/d from usual 1.1bcf/d.

The implication is that Nigeria is now losing about half a billion cubic feet per day, which roughly accounts for about 2000 megawatts of electricity.

Permanent Pipeline Security

A statement by the spokesman for the Vice President, Laolu Akande, said that the Professor Osinbajo further told reporters that “there are efforts being made by the Federal and State governments as well as communities to tackle current vandalism challenges”.

He stressed that the government was also looking beyond the present situation into what could be done in the future to prevent pipeline vandalism.

One of the future steps the Buhari’s administration could take to forestall the perpetration of vandalism, according to Professor Osinbajo, is to establish “a permanent pipeline security force.”

He said such a force, if formed, “would be armed with sophisticated weapons to ensure we contain the vandalism, and overhaul security.” He said a permanent pipeline security force was an option to look at.

Also commenting on the issue, the Delta State Governor, Ifeanyi Akowa, who accompanied the Vice President all through the visit lamented that “the Forcados terminal was important to Delta State and the nation.

The Forcados is where Shell Petroleum Development Company (SPDC) evacuates its products for sale. Now, all the production on land by SPDC is shortened.”

Navy Moves To Combat Maritime Challenges

Nigerian navyThe Nigerian Navy says new strategies have been put in place to combat the challenges of local and international crude oil theft, drug trafficking, gun running, illegal migration and terrorism.

Addressing a news conference in Abuja on Friday, ahead of the 2015 Nigerian Navy Retreat, the Chief of Policy and Plans, Nigerian Navy, Rear Admiral Johnson Olutoyin, said the Nigerian maritime environment and the entire Gulf of Guinea region were witnessing complex security challenges.

He reaffirmed the Navy’s resolve to tackle the contemporary and emerging security challenges bedeviling the nation.

On Friday, the Navy arrested 11 crew members of a vessel, MT Camille, laden with about 4,000 metric tonnes of suspected stolen crude oil at Forcados in Delta State.

The Eastern Naval Command of the Nigerian Navy has also reiterated its commitment to increasing security on Nigeria’s water, to put an end to crime in the nation’s territorial boundaries.

To deepen efforts to end maritime challenges, the Navy has also entered into a partnership with the Nigerian Customs Service in the area of maritime security and exchange of information that will help in improving Nigeria’s economy.

Navy Arrests Suspected Crude Oil Thieves In Delta State

Crude-oil-theftThe Nigerian Navy has arrested 11 crew members of a vessel, MT Camille, laden with about 4,000 metric tonnes of suspected stolen crude oil at Forcados in Delta State.

Briefing reporters on Friday, the Flag Officer Commanding the Central Naval Command, Rear Admiral Suleiman Apochi, reiterated that the Navy had zero tolerance for illegal oil bunkering.

According to him the arrest was made in continuation of the resolve to curtail crude oil theft in the maritime environment in the region where most of the nation’s crude is mined.

He said that preliminary investigations were ongoing and that the Nigerian navy had employed new technologies to curb activities of oil pipeline vandals.

Crude oil theft further depletes Nigeria’s revenue from crude oil in the face of dropped crude oil price.

Nigeria depends largely on crude oil for its revenue, having drifted away from agriculture which was the nation’s economic mainstay before the discovery of crude oil.

The government is, however, making efforts to diversify the economy, with focus returning to agriculture and untapped huge solid minerals.