Nigeria’s Oil Production Get Boost as Shell Resume Export at 400,000bpd Forcados Port this Month

Nigeria’s oil production is expected to increase again as Shell Petroleum Development Company Limited (SPDC) hinted yesterday that its 400,000 barrels per day (bpd) Forcados Oil Terminal would resume export operations by the end of this month, following months of underproduction and a significant drop in foreign exchange earnings from oil export due to crude theft and vandalism.

The oil major predicted that by then, the facility’s ongoing critical repairs would have been finished and normal export operations would have started.

In a statement released Wednesday, SPDC’s media relations manager, Abimbola Essien-Nelson, said, “In addition to the repairs, we are working to remove and clamp theft locations on the onshore pipelines to assure full crude oil receipt at the port.”

Due to the ongoing oil theft that Shell claimed constituted a “existential threat” to its integrity, the Forcados Oil Terminal Offtake Program had been put on hold.

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

“SPDC gives priority to the eradication of unlawful connection points with leaks and active illicit connections,” she stated. This program is ongoing as more unauthorized connections are found while the pipes are being monitored.

“Onshore part of the 48″ Forcados Export Line, which is now inactive and shows no signs of a leak at the interconnection point, is an example of such an unlawful connection.”

According to Wood Mackenzie (WoodMac), a global research and consulting firm, the terminal has an oil export capability of 400,000 barrels per day (bpd).

The Forcados Oil Pipeline System, which delivers oil, water, and related gas from fields in the western delta to the Forcados oil terminal, was described as “the second largest network in the Niger Delta.”

The main trunk line, into which numerous branches from onshore fields feed, is the Trans Forcados Pipeline (TFP). Its capacity at the Forcados River manifold is 850,000 b/d, and Shell previously operated it until 2012.

Essien-Nelson reaffirmed SPDC’s dedication to managing its assets in a safe, dependable, and in compliance with generally recognized best practices.

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

The elimination of unlawful connection points with leaks and active illicit connections is given priority by SPDC. This program is ongoing as more unauthorized connections are found while the pipes are being monitored.

As a result of persistent oil theft and pipeline damage, which led many of the operators to halt production, Nigeria’s oil exports experienced its lowest decline in about 30 years.

The Nigerian National Petroleum Company (NNPC) Limited, a joint venture partner with SPDC, stated in September that the nation was losing 470,000 bpd of crude oil—roughly $700 million per month—to oil theft.

The Organization of the Petroleum Exporting Countries (OPEC) noted in its September report that Nigeria was unable to fulfill its 1.826 million barrels per day (bpd) crude oil production target since it only managed to produce a meager 927,000 bpd in August.

The National Upstream Petroleum Regulatory Commission (NUPRC), which confirmed the development, reported that crude oil output decreased month over month by 11.47 percent to 0.972 mbpd in August from 1.08 mbpd in July 2022.

As oil revenues make up 80% of the federal government’s revenue and foreign exchange earnings, the ongoing fall continues to place a significant financial burden on the implementation of its budget.

October 14, 2022