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Oil Soars On Crude Inventory Draw

Oil Soars On Crude Inventory Draw

Oil prices rose on Wednesday…

Shell Stops Production At Major Nigerian Field Until April

Deepwater Bonga field

Shell’s Nigerian subsidiary announced it has shut down for maintenance the Bonga field, which has the capacity to produce some 225,000 barrels of crude daily, until April. The company provided no further details, but Nigerian media estimated the daily loss in revenue at $10.95 million (3.45 billion naira) at current oil prices.

The managing director of Shell Nigeria Exploration and Production Co. was quoted as saying that the temporary suspension will reduce the need for unscheduled work stoppages, ensuring consistent production in the future.

The Bonga field is the first deepwater oil field that’s being developed in Nigeria, and is responsible for exporting an average 200,000 barrels per day. The news about the work suspension was not unexpected, Reuters noted, as no exports from the FPSO at the site were scheduled for March.

In addition to crude, the Bonga field also yields some 150 million standard cu ft of natural gas.

The news comes on the heels of reports that Shell is reluctant to reopen its Trans Forcados oil pipeline, which was the target of militant attacks over the past couple of years. The pipeline feeds 400,000 barrels of Nigerian crude daily into the Forcados export terminal, and in the past four months has only been in operation for about three weeks because of the attacks.

Related: Fund Managers Value Aramco Below $1.5 Trillion

In February, Nigerian Oil Minister Ibe Kachikwu announced between $50 billion and $100 billion in lost oil revenues due to the series of militant attacks on oil pipelines and related facilities in the Niger River Delta.

Progress in the negotiations between the federal government and Delta militant groups has been uneven, but lately there are indications that the sides could reach an agreement that would put an end to the attacks.

The latest news in this respect was an announcement from Acting President Yemi Osinbajo about plans to build a $20-billion gas industrial park in the Delta, creating a quarter of a million direct and indirect jobs.

By Irina Slav for Oilprice.com

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