FG, IOCs lose N543bn in 6 months over pipeline shutdown

Six months after the Trans-Ramos Pipeline was shut down, the Federal Government, Shell, Total and Nigeria Agip Oil Company Limited have lost around $1.5bn (N543bn) in potential revenue from the sale of crude oil.

It was however, gathered that the pipeline had been repaired but had yet to come back on stream. Shell Petroleum Development Company of Nigeria Limited announced on May 25 this year that it had shut down production following the discovery of leaks on the pipeline, which is located in the swamps of western Niger Delta.

The SPDC is the operator of a joint venture involving the Nigerian National Petroleum Corporation, which holds 55 per cent; Shell, 30 per cent; Total Exploration and Production Nigeria Limited, 10 per cent; and NAOC, five per cent. The Trans-Ramos Pipeline, which supplies crude oil to the SPDC JV-owned Forcados export terminal, has a capacity of around 100,000 barrels per day.

Calculations of potential lost revenue showed that the decline of 100,000 bpd in the nation’s oil exports in six months meant a loss of $1.51bn or N545.6bn (using an exchange rate of N360/$1). A Shell’s spokesperson, Mr Bamidele Odugbesan, however said on Monday that the pipeline had been repaired and “is undergoing extensive testing prior to restart.”

Source: The Punch

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