Nigeria loses over N5.7bn daily to Trans Forcados pipeline shutdown
Ayobami Adedinni is Businessamlive Reporter.
You can contact him on ayobami.adedinni@businessamlive.com with stories and commentary.
Nigeria may be losing over N5.7 billion daily to Trans-Forcados pipeline, (TFP) which was recently shut down following May 7, 2018, suspected explosion on the facility.
Specifically, the country is said to have lost about 250,000 barrels of crude oil production output for which at the oil price of $76 per barrel, the country would have lost $19 million (N5.7 billion) daily at an exchange rate of N305 to the dollar.
The nation’s oil exports are expected to hold at close to 1.8 million bpd in May, loading plans showed. The loading plans included at least 1.799 million bpd on 61 cargoes, but traders said two to three additional 950,000 barrel cargoes of Usan offshore oil field would be added at some point.
Besides the short-term loss of export revenues, the fear is a repeat of the 2016 debacle, when Force Majeure was declared on the TFP lasting 15 months from February 2016, and all assets that were dependent on the pipeline for crude evacuation recorded near zero production throughout the period.
There are, however, strong indications that the flow of crude oil along the pipeline has started to ramp up again, as Salvic Petroleum Resources Limited, handling the emergency repairs is said to be working round the clock to bring the pipeline back up in a matter of days.
Salvic had, under a Technical Services Agreement with the operator of OML30, Heritage Energy Operational Services Limited, rehabilitated the Forcados Pipeline in May 2017 in what was reported to be ‘record time’ after a prolonged shutdown that led to a Force Majeure lasting in 2016 and sustained an uptime of over 85 percent in the twelve months of its operations until last month when it was given termination order, which is now being revised because of the need to fix the pipeline.
The Trans-Forcados pipeline is the major trunk line in the Forcados Pipeline System. It is also the second largest network in the Niger Delta after the Bonny Oil Pipeline System. The 87km trunk line stretches from the Ughelli Pump Station (UPS), transporting crude oil from about fifteen fields in the Western Delta, including those of NPDC, Seplat, Neconde, Shell, Pan Ocean and others, to the Forcados export Terminal (FOT).