Oil Output up by 10% in 2017 – Shell Nigeria

Royal Dutch Shell

Shell Nigeria’s oil production averaged 631,000 barrel per day of oil equivalent in 2017, bolstered by output from onshore and shallow water assets, according to data released by the oil company on Tuesday.

Production was up 10% on the year after the restart of the Forcados export terminal following several months of outage due to sabotage attack by Niger Delta militants.

Output from Shell-operated fields averaged 464,000 barrel of oil equivalent per day while production from offshore and deep-water fields managed by Shell Nigeria Exploration and Production Company Limited (SNEPCo), averaged 167,000 barrel of oil equivalent per day, the company said.

But Shell warned that security challenges in Nigeria’s main oil producing Niger Delta region, remained a major concern.

“Although there has been no damage to key oil and gas infrastructure caused by militant activity since November 2016, the security situation remains volatile in this region of the country,” Shell said in briefing notes on its Nigerian operations in 2017.

Nigeria’s oil production plummeted to nearly 30-year low of a little over 1.0 million barrel per day by mid-2016 at the height of militancy in the oil region.

Shell, Nigeria’s biggest oil producer was the most affected following the bombing of the Trans Forcados export line on three occasions in 2016 and the subsequent closure of the 250,000 barrel per day capacity Forcados export terminal for several months.

Nigerian oil output including condensates has however, been ramping up to 2.17 million barrel per day, according to government estimates.

The company said it recorded crude oil theft on its pipeline network of about 9,000 barrel per day in 2017, up from 6,000 barrel per day in 2016, while the number of “sabotage-related oil spills in 2017 increased to 62 compared to 48 in the preceding year largely due to the militant-induced shutdown of the Forcados export terminal in 2016, which reduced opportunities for third party interference.”

Shell said its 225,000 barrel per day capacity Bonga deep-water field operated at more than 83% of its capacity in 2017, lower that the 90% capacity utilization achieved in 2016, “due to a major turnaround maintenance in March and April (2017).”

Oil exports account around 90% of the Nigerian government export earnings.

Shell said its companies in Nigeria paid $1.1 billion in royalties and corporate taxes to the Nigerian government in 2017.

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