NNPC loses N27bn to Forcados shutdown

NNPC loses N27bn to Forcados shutdown
NNPC’s Building

 The Nigerian National Petroleum Corporation said its subsidiary, the Nigerian Petroleum Development Company, lost over N27bn in July as a result of the shutdown of the Forcados export terminal.

On February 21, Shell declared force majeure, a legal clause that allows it to stop shipments without breaching contracts, on exports of Forcados, one of the nation’s largest oil grade, a week after militants blew up a pipeline feeding the terminal, knocking out at least 250,000 barrels per day.

The NNPC, in its latest monthly financial and operations report, said it posted a trading deficit of N24.18bn in July as against N26.51bn deficit reported in June.

It said the improvement in performance was largely due to increase in revenue stream from the NPDC and the Pipelines and Products Marketing Company, despite the upsurge in upstream and downstream vandalised points.

“For the NPDC, substantial portion of crude oil sales for the month estimated to be in excess of N27bn could not be realised due to force majeure declared by the SPDC as a result of the vandalised 48-inch Forcados export line,” the corporation stated.

It noted that the nation’s crude oil grades, including Bonny Light, Forcados, Brass and Qua Iboe, had been under periods of force majeure, which had negatively impacted on the targeted oil production of 2.2 million bpd in the 2016 national budget.

The NNPC said, “The activities of pipeline vandals and oil thieves are taking a heavy toll on operations of the oil and gas industry, with over 500,000bopd lost as of May 2016. In June 2016, there was additional shut-in of about 50,000bopd as a result of sabotage/attack on the delivery pipelines to the Escravos Terminal.

“At the Forcados Terminal, about 300,000bopd remained shut-in and cargoes were deferred until repairs are completed. The force majeure declared on May 10, 2016 for repair works on the Nembe Creek Trunk Line and the resultant shut-in of about 275,000bopd subsists.”

According to the report, the degree of turbulence in the nation’s oil and gas sector due to renewed militancy has grossly impacted on oil and gas production with the attendant consequences for the economy.

In July, about 311 vandalised points were recorded, the corporation said.

It added that the NPDC production continued to be hampered by the incessant pipeline vandalism in the Niger Delta.

“The NPDC is projected to ramp-up production level to 250,000bpd after the completion of the ongoing NPDC re-kitting project and repair of vandalised facilities,” the NNPC said.

It noted that the total export crude oil and gas receipt for the period of August 2015 to July 2016 stood at $3.21bn.

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