Page 6 - AfrOil Week 46 2019
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AfrOil
PIPELINES & TRANSPORT
AfrOil
The 5,700-km system would run parallel to Africa’s Atlantic Ocean shore from Nigeria to Morocco and would include links to onshore facilities in Nigeria, Côte d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Sene- gal, Mauritania and Morocco, as well as a con- nection to the European gas grid.
The cost of this project is projected to hit $670bn. Nigerian and Moroccan officials have said that the pipeline network will have to be built in stages over a period of 25 years.
Benkhadra said last week that Morocco and
Nigeria expected international oil companies (IOCs) to join the Atlantic pipeline scheme. So far, though, no major investors have committed to participating.
The parties have not said exactly when they hope to begin building the network and have not made a final investment decision (FID) yet. They did complete a feasibility study in January of this year, though. The Fitch ratings agency has criticised the conclusions of this study, say- ing that it underestimated the financial, politi- cal and security risks of the project.
Nigeria says it is complying with OPEC’s production policy
PERFORMANCE
NIGERIA
A high-ranking representative of Nigerian National Petroleum Corp. (NNPC) declared last week that his country was in compliance with OPEC’s production quotas.
According to Roland Ewubare, the chief operating officer of the national oil company (NOC), Nigeria is set to extract 1.6-1.7mn bar- rels per day of crude oil this month. “The last quota put us at 1.7mn bpd and we are commit- ted to that threshold ... [Our] current production with the cuts is between 1.6 and 1.7mn barrels per day for November,” he said on the sidelines of an industry conference in Abu Dhabi.
Ewubare did indicate that this number did not cover all of Nigeria’s liquids. The West African country is currently producing about 2mn bpd of crude oil and gas condensate, he explained. He stressed, though, that Nigerian authorities were committed to remaining in compliance with OPEC policies.
Abuja has often exceeded the quotas set by thecartelundertheOPEC-plusagreementwith Russia and other non-member states. OPEC set that quota at 1.685mn bpd in July but raised it later in the year to 1.774mn bpd. It reportedly did so at the behest of Nigerian officials, who argued that the limit had been imposed before commercial production had begun at Egina, a new offshore field that is yielding about 200,000 bpd of light crude.
Despite the increase, Nigeria continued to exceed its quota after July. OPEC’s estimates show that the country produced 1.866mn bpd of oil in August. Nigeria’s Minister of State for Petroleum Resources Timipre Sylva acknowl- edged those violations in October but said that efforts to curb output were underway.
Pipeline sabotage
In related news, the Nigerian company Aiteo said at the weekend that its production levels had fallen once again as a result of problems
with the Nembe Creek Trunk Line (NCTL), which carries light sweet Bonny Light crude.
Aiteo said that the pipeline was not function- ing properly because it had been repeatedly sab- otaged by vandals. This sabotage has forced the pipeline’s operator to suspend oil flows through the link at least twice this year – once in April because of a fire and once in September, which led to a declaration of force majeure. It has also caused the pipeline to shut down for a total of 200 days over the last four years.
Aiteo did not say exactly how much output had dropped. It did say, though, that attacks on the NCTL were negatively affecting its opera- tions. “The disruptions that these attacks have brought about [have] led to direct, irretrievable and significant losses in production and con- sequently [have] created revenue deficits that [directly impact] all the shareholders,” the com- pany said.
“By virtue of this level of sabotage, the NCTL hasbeenshutdownfor61daysthisyearalone,” it added. Damage by vandals has accounted for 83% of all suspensions since the beginning of 2019, it explained.
Total’s Egina FPSO offshore Nigeria (Photo: Samsun Heavy Industries)
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w w w . N E W S B A S E . c o m Week 46 20•November•2019
