Shell Petroleum, the largest petroleum company in Nigeria, reported 12 oil spill occurrences in February 2023, a 100% surge from the 6 incidents reported in January 2023. Also, comparing February 2023 to the same month in 2022, nine incidents were documented, a 33.3% increase from the nine events recorded in the previous year. The incident, which was mostly blamed on sabotage, led to the spill of a commercially significant amount of crude oil, which negatively affected the economy and the environment.
According to Shell Petroleum’s most recent Oil Spill Data, incidents happen in various places like the Yokri well flowline in Yokri, the Rumuekpe Nkpoku pipeline in Ibaa, the Kolocreek-Rumuekpe pipeline in Odau, the Gbaran flowline in Opolo, and the Ogale-Bomu pipeline in Kpite. The corporation remarked on the history of successful production by Shell Companies in Nigeria in briefing notes. Nevertheless, in 2021, the combined output of the SPDC Joint Venture, JV, and SNEPCo (Bonga), which had been producing 614,000 barrels of oil equivalent per day in 2020, decreased to 493,000 barrels per day. The SPDC JV output reduced to 383,000 BOE in 2021 from 2020’s output of 497,000 barrels of oil equivalent.
Security concerns led to a significant decline in oil production.
The decline in output was mostly caused by reduced oil production due to increased security concerns, such as crude oil theft and illegal oil processing. The sale of SPDC’s 30% stake in OML 17 worth $533 million also contributed to lower production numbers. Rising oil prices in the fourth quarter of 2021 reportedly led to an increase in crude oil theft from pipelines around the region. Production in some regions has been suspended because of increased security concerns. Businesses all around the Niger Delta are feeling the effects. In 2021, crude thefts surpassed 200,000 barrels per day, or around a quarter of onshore production, according to the Nigerian National Petroleum Corporation (NNPC).
As of March 3, 2022, the SPDC JV has declared force majeure over its Bonny export programme. The Bonny Terminal has declared force majeure due to severely reduced delivery of crude oil as a result of theft from unauthorized connections to pipelines. Production at SNEPCo’s Bonga field, located off the coast of Nigeria in the Gulf of Guinea, has been going strong despite certain obstacles. From a 2020 estimate of 117,000 BOE/day, production has dropped to 110,000 BOE/Day. Due to maintenance on two lines in 2021, this happened.
Government should focus on the problems plaguing the oil and gas sector.
Speaking to Vanguard on the issue in a phone interview, Mazi Colman Obasi, the national president of the Oil and Gas Service Providers Association of Nigeria, urged the government to take action against oil theft and other wrongdoings in the sector. He said the incoming government should focus on addressing the many problems plaguing the oil and gas sector, including the vandalism of pipelines, the theft of oil, and illegal refining, all of which have contributed to the waste of commercial oil, a drop in revenue, and adverse environmental effects.
Also, Obasi explained that a great deal of deliberate effort should be taken to encourage and preserve the growth of communities in order to establish lasting development for oil and gas operations within Niger Delta and some other rising states with petroleum-bearing potential. Similarly, Dr. Muda Yusuf, the Director of the Centre for the Promotion of Private Enterprise, included in his Economic Agenda for the Next Administration a demand for the government to launch an unrelenting fight against oil theft in Nigeria.
Future investment will focus on deep-water and gas positions.
Together, the SPDC and SNEPCo have produced an average of 606,000 barrels of oil equivalent per day during the past five years. After much consideration, they have minimized their engagement in onshore oil and gas production in Nigeria and redirected their investment toward deep-water and gas assets. To further clarify, this fits in with Shell’s overall Powering Progress agenda. They are currently discussing potential approaches with the government of Nigeria and other related stakeholders.