NG News: Shell Loses Fresh 180,000 BPD of Oil Production
- ex ThisDay -
By Patricia Ubaka, 07.26.2006
Nigeria's oil production has suffered a setback following Shell Petroleum Development Company’s (SPDC) forced shut-in of 180,000 barrels per day (bpd) of oil production due to a pipeline leak at the Shell-operated Nigerian Bonny oilfields. The leakage occurred on the pipeline feeding the Bonny Oil Terminal in Rivers State.
News of the production shut down has sent shockwaves to the international market, with oil prices surging over the $75 per barrel level triggered by fears of shortage in the supply of the highly sought-after Bonny Light crude.
Shell officials told THISDAY yesterday that the company was forced to close about five oil flowstations in order to curtail the leaking oil from the burst pipeline.
The leak the officials said, occurred at Shell's Sanbarth-Krakrama pipeline, a section of the Nembe Creek trunk line, which is linked to the 390,000 bpd Bonny crude stream. "We have had to shut four or five flowstations in order to manage a leakage from our pipeline feeding the Bonny terminal," a company official said.
"The pipeline leakage occurred over the weekend. We can't say now precisely what caused it until the joint investigative team concludes its work," the official added.
Shell has now cut a total of 653,000 bpd of oil production, out of which about 470,000 bpd came from the Warri area of Delta State.
In monetary terms, Shell and its partners including the Nigerian National Petroleum Corporation (NNPC) might be losing $48.98 million (N6.3 billion) daily.
Shell's Bonny Light crude grade is highly favoured by oil consumers. September deliveries for the Brent crude traded higher at $75.41 barrel as fears of output cut back in Nigeria mount. The light sweet is attractive to refiners because of its relatively high gasoline yield and any output disruption can push oil prices sharply higher.
"A lot of people were expecting a more bearish outlook but then the Nigeria news broke and lots of traders got caught out," said an analyst.
The latest round of production losses suffered by Nigeria, according to industry officials, came on the back of existing output problems from the country. In June, Nigerian oil production climbed 50,000 b/d to 2.35 million b/d, partly offsetting the 500,000 b/d of production.
"With limited spare capacity throughout the supply chain, oil prices are responding dramatically to every threat of supply distruption," the Centre of Global Energy Studies said Monday in its July report, adding that rising demand from refiners in the third quarter was expected to keep oil prices strong, while "geo-political and weather-related concerns" would add volatility.
Elsewhere, China imported 11.79 million metric tones of crude in June this year, up 4.8 per cent compared to the same month of 2005, customs data showed yesterday.
However, month-on-month June crude imports were down 4.8 per cent from the 12.39 million metric tones recorded in May, the Chinese General Administration of Customs reported.
In another development the Petroleum Products Pricing Regulatory Agency (PPPRA) has conducted a census of retail outlets across the country with a view to collating data for the effective planning of an efficient supply and distribution of petroleum products.
The exercise was in line with the Agency's mandate of regulating products supply and distribution as well as establishing an information and data bank to facilitate the making of informed and realistic decisions on pricing policies.
Commenting on the just concluded exercise, the Executive Secretary of the PPPRA, Dr. Oluwole Oluleye, said that the retail outlets census could not have come at a more auspicious time than now when the global business environment is data and statistics driven for which Nigeria cannot afford to be left behind.
He explained that the data compiled would not only lead to the creation of a reliable data bank on retail outlets but also provide the much-needed information for making investment decisions thereby enhancing the overall objective of the deregulation policy of government.
He commended Stakeholders in the downstream petroleum industry especially petroleum marketers for embracing and supporting the exercise.
During the 2006 nationwide retail outlets census, data were collated on the number, spread, storage capacity and other relevant information on retail outlets across the country.
When analysed, the data will assist the PPPRA to maintain a functional record of developments in the retail business as well as enable the country plan and hold strategic reserves of vital petroleum products.
The Governing Board of the PPPRA, under the chairmanship of Chief Rasheed Gbadamosi had earlier resolved that the Agency works with other stakeholders in the downstream sector to prepare an inventory of all retail outlets nationwide. Consequently, a Technical Committee on Retail Outlets Survey, comprising the Petroleum Products Pricing Regulatory Agency (PPPRA), the Department of Petroleum Resources (DPR), Independent Petroleum Marketers Association (IPMAN), Depot and Petroleum Products Marketers Association (DAPPMA), and the Major Marketers, was constituted to conduct the exercise on behalf of all Stakeholders in the industry.
AI
