Nigeria eyes 500,000 bpd rise in oil output by July 2008
...as Shell lifts force majeure on Forcados oil field
By Sulaimon Salau
NIGERIA'S oil output may rise by 500,000 barrels a day by July 2008 if security in the Niger Delta continues to improve and a new offshore field starts as scheduled.
The anticipated recovery in oil supply follows almost two years of declining or stagnant exports due to militant attacks that halts oil production from the oil-rich Niger Delta region since February 2006.
Workers are slowly returning to the Forcados and EA oilfields and Shell, one of the most affected multinationals has already restored about 65,000 barrels per day (bpd) of the 477,000 bpd output lost in the region.
Shell Petroleum Development Company (SPDC) on Monday confirmed that it has lifted a month-long force majeure on its Forcados oil terminal in Nigeria, signalling the company is set to begin pumping more oil from the area as violence in the region abates.
Shell spokeswoman, Eurwen Thomas, who confirmed this to an agency said, "The force majeure was lifted last week." She added that the company's force majeure, which indemnifies Shell from litigation if it fails to meet its contractual obligations, was still in place at its EA oil field.
The Forcados platform operated at a capacity of 380,000 barrels a day, prior to militant attacks that shut the terminal in February 2006. Shell, according to another senior official, hopes to see another 270,000 bpd from Forcados and EA by July next year.
"That will be possible if the security environment is stable," the source said.
Besides, Chevron on its part plans to add another 230,000 bpd by June through its Agbami new offshore oil field.
Nigeria pumped a total of 2.16 million barrels per day (bpd) of crude oil in September, down from 2.46 million at the end of 2005 before the latest phase of disruption began, according to the Reuters monthly OPEC output survey.
If things go to plan, crude supply could reach 2.66 million bpd by the start of the third quarter.
In the draft budget for 2008, the government has used an average oil production of 2.44 million bpd for the year.
For the Organisation of Petroleum Exporting Countries (OPEC), the recovery should provide a windfall for the treasury, but will also present a challenge to OPEC, which has set a 2.16 million bpd supply limit for Nigeria from November.
Security has improved in Nigeria's southern oil producing region since the inauguration of President Umaru Yar'Adua in May, when militant groups began a ceasefire to allow for talks with the new government.
However, the prominent armed group, the Movement for the Emancipation of the Niger Delta (MEND), has threatened to call off the truce over the arrest of one of its leaders last month.
Gunmen killed a Colombian contractor and kidnapped two other foreigners from an industry yard in Port Harcourt after the threat last month.
But violence in the region, where most of Shell's closed oilfields are located, has dropped sharply.
From 65,000 bpd presently, Shell is expected to raise its supply to the Forcados export terminal in Delta State by about 90,000 bpd in December and another 70,000 bpd in July, the senior industry source said.
The company has also begun daily helicopter flights to its 115,000 bpd EA field off the coast of neighbouring Bayelsa State, and this is now expected to return by mid-year, he added.
Sources revealed that Agbami's huge floating production facility left South Korea last week and is due to arrive off the Nigerian coast by December, hoping for a start-up in June.
Nigerian exports will jump again in December 2008 with first oil from Total's 180,000 bpd Akpo field, although this light-density condensate does not count towards Nigeria's crude oil supply limit under OPEC rules.
According to industry sources, expected new oil, NGL and condensate fields in the country by next year is put as: Shell forcados new oil expected by December 2007 is billed to produce 90,000 bpd; Chevron's Agbami, June 2008 to produce 230,000 bpd; Shell Forcados, July 2008, 70,000 bpd; Shell EA, July 2008, 115,000 bpd and Total's Akpo field expected new oil by December 2008 at 180,000 bpd capacity.
