Nigeria’s crude oil export is set to increase by about 150,000 barrels per day, as Shell Petroleum Development Company, SPDC, yesterday, announced the reopening of the Nembe creek crude oil pipeline, which was shut down due to sabotage.
Using the current crude oil price of $55 per barrel, this will translate to an increase of $8.25 million, about N1.403 billion in Nigeria’s daily crude oil earnings.
The pipeline, according to a spokeswoman for Shell which carries the Bonny Light crude oil for export, was reopened, weekend.
The pipeline was closed January 17, 2015 due to a leak, with the SPDC removing five oil theft connections during the closure.
According to provisional loading programmes, Nigeria plans to export 188,700 barrels per day (bpd) of Bonny Light in March, up from the 171,000 bpd originally planned in February.
The Trans Forcados oil pipeline, which was shut about the same time with the Nembe creek pipeline has been reopened.
The pipeline, the NNPC said, transports the Forcados crude oil grade in the Niger Delta region and was scheduled to export about 260,000 barrels per day in January and 210,000 bpd in February.
Executive Director, Gas and Power, NNPC, Mr. David Ige, disclosed that the pipeline, which had been shut for about a week due to sabotage, resumed operations a couple of days ago.
Ige explained that the closure of the pipeline network had led to the shut-in of about 200,000 barrels per day of crude export, halved Nigeria’s gas production and deprived two key power plants of gas supply.
Ige said: “Forcados is a major artery. When this pipeline is out we lose gas production. It accounts for 40-50 per. cent of gas production in the country.
Professor Chinedu Nebo, Minister of Power, disclosed that the Forcados pipeline was closed after a leak occurred at the Oteghele axis in the southern state of Bayelsa, adding that there was no timeframe yet for the duration of the disruption.
He appealed for the understanding of electricity consumers, for the reduction in power supply which this development would cause.
Oil prices rally above $53
Meanwhile, crude oil prices rose yesterday as investors shrugged off a US refinery strike and focused on a falling U.S. rig count that signalled lower production down the line.
“There were a lot of people on the sidelines waiting for an opportunity to buy,” said Bjarne Schieldrop, chief commodity analyst at SEB.
“Brent has struggled sideways for a long time but it closed above the 20-day moving average on Friday for the first time since July, and the rig count is falling sharply. So now they think, maybe this is the time to buy.”
