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The Trans Forcados pipeline, operated by Shell, may be restarted before the week’s end, according to local sources who spoke to Reuters. The Astro Perseus tanker, sailing under a Greek flag, is en route to Nigeria at the moment, and according to the sources, may load at the Forcados terminal later this week.
The Trans Forcados pipeline was the object of several militant attacks last year, which meant that for the most part of 2016 it remained shut down. The first attack that stopped the flow of crude came in February 2016, followed by another in July. Repairs continued until October and the pipeline was restarted, only to be shut down before the month ended, after a bombing from a new militant group that had emerged in the Niger Delta, the Niger Delta Greenland Justice Mandate.
This bombing was followed by two more in November, which crippled the pipeline for several months. The renewed violence came at a time when Nigeria was ramping up its crude oil output, with the Forcados terminal, among others, restarting operations after several months of force majeure after earlier attacks. Also in November, President Buhari had intensified negotiations with militants in the Delta, to broker some kind of a peace agreement in the restive oil-rich region.
The Trans Forcados pipeline has a daily capacity of 240,000 bpd, with average daily flows ranging between 200,000 bpd and 240,000 bpd. Shell, which operates both the pipeline and the Forcados terminal, with a capacity of 400,000 bpd, is now testing the pipeline. According to Reuters, the company will not issue a loading program for the terminal before the tests are completed successfully.
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Nigeria is producing less than 2 million bpd of oil currently, with a production capacity of 2.2 million bpd, but plans to expand this capacity to 2.5 million bpd over the next three years. To enable the increase, Abuja changed its funding arrangements with foreign companies operating in the Niger Delta, abandoning the cash call system of funding its part of international JVs with majors including Shell, Exxon, and Eni.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.