Crude Oil Production deferment in 2020 cost Nigeria N2.1trn – NEITI
Nigeria lost a whopping N2.1 trillion as a result of crude oil production deferment in one year, a report by the Nigeria Extractive Industries Transparency Initiative (NEITI) has shown.
The 2021 report said the huge loss was recorded in 2020.
Deferment is the reduction in production or injection availability caused by an activity, breakdown, trip, poor equipment performance, or sub-optimum operations, resulting in a reduction in the volume sold or injected, delaying the production or injection until a later time.
According to the NEITI’s Oil & Gas Report 2020, the deferment was recorded by crude oil companies, including SNEPCO, CNL, NAOC, SPDC, NPDC SEPLAT, Newcross E & P, and APENL.
Others are: Continental, Energia, AITEO, Oriental, APDNL, Consolidated, Waltersmith, AND Chorus operating in the country.
A breakdown of the loss revealed that Shell Nigeria Exploration and Production Company (SNEPCO) recorded the highest deferment of approximately 25 percent (17.8mn/b), followed by Chevron Nigeria Limited (CNL), 17 percent (12.2mn/b).
The Nigerian Agip Oil Company (NAOC) ranked third on the list with 15.4 per cent (11.1mn/b), and Shell Petroleum Development Company (SPDC) with 15.1 per cent (11mn/d).
Also, the Nigerian Petroleum Development Company (NPDC SEPLAT) deferred 7.4m/b or 10.2 per cent/b of the production, while NewCross E&P deferred 4.2m/b or 5.8 per cent of output in that year.
Meanwhile, Addax Petroleum Exploration Nigeria Ltd (APENL) could not produce 2.3mn/b or 3.1 per cent of its oil in that year, Continental deferred 2.1mn/b or 3 per cent, while SEPLAT deferred 1.3mn/b or 2 per cent of its production that year.
In addition, the Nigerian Petroleum Development Company Ltd deferred 1.2mn/b or 1.7 per cent production in the year under review, while Energia could not produce 966t/b or 1.3 per cent.
Similarly, Aiteo deferred approximately 470t/b or 1 per cent; Oriental, 265t/b or 0.1 per cent; and Addax Petroleum Development Nigeria Limited (ADPNL) deferred 144t/b or 0.20 per cent.
And Consolidated Oil Limited could not produce 44t/b or 0.06 per cent; Waltersmith, 24t/b or 0.03 per cent; with Chorus Energy Limited ranking last on the deferment list with 5t/b or 0.01 per cent.
In total, the country lost approximately 73mn/b to crude oil production deferment in 2020, the report noted.
Global Oil Prices
Still according to the report, International Brent sold at $71 in 2020, pegging total revenue loss to deferment by Nigeria at $5.2bn or N2.2trn.
A similar report by the NNPC for August 2021 put crude oil production loss to deferment in April same year at 3.3mn/b. Brent was $71/b in 2021. Total revenue loss to deferment in just April last year was N248mn.
A breakdown of the NNPC’s report said injection into Forcados was curtailed due to Seplat shutdown for planned TFP repairs. Pan Ocean OML 147 shut-in production to avoid tank top and also because of industrial action. Also, some stations were shut down on 11/03/2021 for Trans Ramos Pipeline repairs. The cumulative loss for the period was 1.5mn/b.
Production shut down due to maintenance in Yoho and Ima terminals amounted to a 210,000b and 31,000b loss respectively.
The power outage resulted in a shutdown on 30/01/2021 at Bonga terminal. This gave an aggregate loss of 1,000,000b.
NEITI/Punch/Hauwa Abu
