Oil production drops by 127,000bpd
Nigeria's crude oil production has dropped by 127,000 barrels per day from about 2.3 million bpd following the declaration of force majeure on Usan crude by the oil major, Total Plc.
The force majeure, Total said in a statement made available to Reuters, was expected to affect 127,000bpd of Usan crude expected to be exported in June.
A force majeure exempts parties to a contract from their obligations due to circumstances beyond their control.
Total confirmed that production was completely halted, but said there was no further information on the outage, or how long it was likely to last at this stage.
The oil major declared that four cargoes of Usan, which represent around 127,000bpd due to be exported in June, would be shut in.
Usan is an offshore field, and so, is not subject to theft like Brass River or Bonny Light grades of crude oil.
The force majeure for Usan adds to those on Royal Dutch Shell's Bonny Light and Eni's Brass River.
Already, oil production in the country had on April 18, 2013, dropped by 150,000bpd when the Nigerian National Petroleum Corporation/Shell Petroleum Development Company Joint Venture declared a force majeure on Bonny Crude due to incessant crude oil theft.
The Acting Group General Manager, Public Affairs Division, NNPC, Ms. Tumini Green, who lamented the development, said there had been a significant drop in crude oil production for the first quarter of 2013.
She attributed the situation to incessant crude oil theft and vandalism along major pipelines in the Niger Delta.
As a result of this, she said the Federal Government lost about N191bn ($1.23bn) to oil theft and vandalism in the first quarter of the year.
Green said daily crude oil production fluctuated between 2.1 million and 2.3 million barrels per day during the first quarter of the year, compared with the projected estimate of 2.48mbpd.
'Expectedly, this fall between actual production and forecast in first quarter of 2013 has resulted in a drop in crude oil revenue of about $1.23bn (N191bn) that should have accrued to the Federation Account,' she said.
Speaking on the force majeure on Bonny Crude attributed to incessant crude oil theft, Green said, 'Investigations showed that 53 break points were discovered along the 97-kilometre Nembe Creek Trunkline. Repair work is expected to last about six weeks.
'This will further reduce our April and May monthly average to about 2.2 million bpd and further decrease crude oil revenue by about $554m (equivalent to N83bn) that should have accrued to the Federation Account.'
The NNPC spokesperson, however, assured that the maintenance work would have minimal effect on gas supply to the domestic market.
Meanwhile, SPDC said it had since April 15, 2013 shut down the NCTL to remove crude oil theft connections and investigate suspected leaks.
The Managing Director, SPDC and Country Chair, Shell Nigeria, Mr. Mutiu Sunmonu, said, 'We're concerned that the NCTL has been targeted by crude oil thieves repeatedly since we installed the new line in 2010 at a cost of $1.1bn. (Punch)