Oil production may drop over pipeline explosions
According to our correspondent's findings, Nigeria's oil production output may fall this month due to a new pipeline explosion.
A new explosion was reported on Thursday at Rumuekpe community in Rivers State's Emuoha Local Government Area, rocking a major export pipeline in the Niger Delta, killing about 12 people.
The explosion happened at a major export pipeline, the 180,000 barrels per day Trans Niger Pipeline, which runs through Rumuekpe.
The TNP pipeline, Nigeria's main liquid hydrocarbon delivery channel, was closed for the majority of last year due to force majeure. The TNP, in addition to transporting crude to the Bonny Export Terminal, is part of the gas liquids evacuation infrastructure, which is critical for continued domestic power generation and liquefied gas exports.
According to data obtained from Reuters' secondary sources survey, Nigeria's crude oil production has begun to recover, increasing by 100,000 barrels per day last month.
A daily increase of 100,000 barrels resulted in a monthly increase of 2.8 million barrels. According to the survey, Nigeria's oil output for last month was 1.3 million barrels per day, for a total output of around 36,400 million for the month. In February, Nigeria's crude grade, Bonny Light, sold for $84 per barrel, resulting in total earnings of about N1.408 trillion.
However, with the new development, Nigeria risks losing 180,000 barrels per day of export this month, which could amount to more than four million barrels of export if the pipeline is not repaired quickly.
On Friday, Brent International closed around $86 per barrel, and Nigeria's crude grade, Bonny Light, is typically sold at a premium of $1 per barrel over Brent. Experts and analysts have continued to predict higher oil prices in 2023.
The Rivers State Police Command's Public Relations Officer, Grace Iringe-Koko, confirmed the explosion happened around 2 a.m., when a bus carrying illegal crude oil exploded just outside the site.
"A preliminary investigation by the police command indicates that the victims were scooping crude oil when the site caught fire. So far, it is believed that 12 people have been burned to death. The victims' identities are still unknown.
"Five vehicles, four Keke NAPEP (commercial tricycles), and one motorcycle were completely destroyed," Iringe-Koko revealed.
In addition, Fyneface Dumnamene, Executive Director of Youth and Environment Advocacy Centre, stated that the organization's investigation revealed that all those who were at the exact tapping point in the "pit" were killed.
He also stated that the explosion killed some of those who had loaded the crude or were waiting to load it, including women.
Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, confirmed the incident on the shell-operated line in a statement, noting that the matter had been reported to the regulatory agency.
"On Thursday night, an explosion caused a major fire near a pipeline in Rumuekpe Community, Emohua Local Government Area, Rivers State," according to the NUPRC.
"In accordance with its statutory regulatory oversight of upstream petroleum operations in the Nigerian oil and gas industry, the commission has begun investigations into the incident in collaboration with relevant stakeholders and will provide appropriate updates," he said.
Crude oil theft and explosions caused by pipeline vandalism have continued to cost the federal government vast sums of money.
Mele Kyari, Group Chief Executive Officer of Nigeria National Petroleum Company Limited, recently stated that the country could be losing up to 900,000 barrels per day due to the threat.
Due to crude oil theft, the country has also been unable to meet its Organization of Petroleum Exporting Countries quota for over a year.
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