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Nigerian Trans Forcados Pipeline Could Reopen By End-Q2

The Trans Forcados Pipeline in Nigeria - which has suffered several militant attacks and has been shut for most of 2016 – could resume operations at some point at the end of the second quarter this year, a top manager with a company operating in Nigeria said on Monday.

Austin Avuru, chief executive at Seplat, told Reuters that Trans Forcados could re-open “towards the end of the second quarter”.

Seplat, which holds working interests in several fields in the Niger Delta and is exporting crude oil via Trans Forcados and the Warri refinery, has seen its production drop due to the militant attacks that have crippled Nigeria’s oil production last year.

In its latest available results release, for the first nine months of 2016, Seplat said in its production update that its average total working interest production for the period stood at 26,233 boepd, down by 34 percent on the year, from 40,012 boepd for the first nine months of 2015, “due to the shut-in and suspension of oil exports at the Forcados terminal from mid-February to mid-October as a result of damage to pipeline infrastructure at the loading arm”.

Before the Forcados shut-in, Seplat’s working interest production was averaging over 52,000 boepd.

At the results release at end of October, Seplat said that the terminal operator was working to return Trans Forcados to steady state, which would enable Seplat “to establish a regular pattern of production into the Trans Forcados Pipeline and loading from the terminal”.

Related: Oil Prices Spiral Lower On Signs Of Strong U.S. Oil Recovery

However, in early November Trans Forcados was bombed again in a renewed spate of attacks just as Nigeria was slowly starting to recover part of the production it had lost to attacks.

By November 2016, however, Nigeria had managed to increase its oil production to nearly 1.8 million barrels per day, according to OPEC direct communication figures. The November figure meant that Nigeria was regaining its status as Africa’s top oil producer--a status that had been assumed by Angola for the seven months leading up to September.

Still, even if it is exempt from OPEC production cuts, Nigeria needs to find a way to prevent militant attacks and restart the oil infrastructure and facilities damaged by insurgency, in order to ramp up production to the 2.2-million-bpd level before the attacks started.

By Tsvetana Paraskova for Oilprice.com

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