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Nigerian independent oil producer, Belemaoil Producing, has restarted operations at its Oil Mining Lease (OML) 55 following a three-year hiatus due to damage from theft-related incidents.
In a statement released yesterday, the company detailed that operations at OML 55 were halted in 2021 as a result of significant oil theft affecting its delivery pipeline to the Bonny terminal.
Belemaoil noted that the lease encompasses five oilfields, collectively yielding approximately 14,000 barrels of oil per day and over 70 million standard cubic feet of gas each day.
The arrival of the first floating oil storage vessel at OML 55 on October 6 was described by a company spokesperson as a significant achievement in the effort to resume production.
Located about 40 km west of the Bonny oil export terminal, Belemaoil acquired OML 55 from Chevron Corp in 2015, but operations were suspended in 2021 due to persistent oil theft issues.
Oil theft in Nigeria remains a critical concern, with the NNPCL and the Ministry of Petroleum estimating that the country loses between 200,000 and 400,000 barrels of crude oil daily. This is particularly impactful considering Nigeria's average crude production in August was 1.35 million barrels per day, which is below its OPEC quota of 1.5 million barrels per day.
In 2024, Nigeria has consistently struggled to meet its OPEC oil production target of 1.5 million barrels per day, adversely affecting its revenue and foreign exchange earnings.
The Ministry of Petroleum Resources aims to achieve a production level of 2 million barrels per day by the end of the year. To enhance production and combat theft, the federal government has engaged local security contractors to address the issue, although the success of these initiatives remains to be seen.
In a recent interview with Channels Television, Mr. Mele Kyari, the GCEO of NNPCL, discussed the deactivation of illegal refineries that commenced in 2022. He reported that 8,684 sites, referred to as “boiling points” rather than legitimate refineries, were shut down. Furthermore, there were 6,610 illegal pipeline connections, with approximately 5,913 having been eliminated. However, he pointed out that more than 1,000 illegal connections persist, with new reconnections occurring daily despite ongoing removal efforts.
Exit of IOCs from onshore operations
The ongoing issues of theft and other challenges in the Niger Delta have prompted multinational oil companies to withdraw from onshore operations. Major players such as Exxon Mobil, ENI, and Shell are divesting their onshore assets in favor of safer offshore and deepwater ventures.
ENI has successfully finalized the sale of its onshore oil assets to Oando, while other companies continue to face regulatory challenges related to decommissioning and host community issues.