Pan Ocean Oil Corp., a Nigerian oil-exploration and production company, plans to commission an underground pipeline buried beyond the reach of thieves who siphon off an estimated 100,000 of crude a day.

The new pipeline, with the capacity to ferry 150,000 barrels per day and which cost $500 million to build, will be put into service in August, Felix Amieyeofori, Pan Ocean’s executive consultant for operations, said in an interview in his office. The conduit connects the company’s Amukpe oil field to the Escravos oil-export terminal on the Atlantic coast.

“We adopted the horizontal-drilling technology to bury 20-inch thick pipes 40 meters to 45 meters below the surface,” Amieyeofori said. Such a pipeline would be “extremely difficult to sabotage,” he said.

OPEC-member Nigeria pumped 1.86 million barrels of crude in May as it slowly restores output lost to militant attacks in 2016.

A major challenge for Africa’s largest oil producer has been the activities of saboteurs, including thieves that caused an 80% jump in oil spills in 2018, according to Royal Dutch Plc, the biggest operator in the country’s oil and gas industry.

The Amukpe-Escravos line offers an alternative route to companies operating in the western delta currently using the Nembe Creek and the Trans Forcados pipelines that suffer frequent closures due to sabotage.

They include Seplat Petroleum Development Co., Sahara Energy Group and Nigeria Petroleum Development Co., the exploration unit of the state oil company.

“We have a lot of companies queued for this line, by the numbers we see, we are going to run over capacity,” said Amieyeofori.

Pan Ocean, which currently produces about 30,000 barrels of oil daily, saw its plan to reach 70,000 barrels in five years set back by the government’s revocation of one of its oil-mining leases last week.

The company is in discussions with the government to resolve the issues that led to the revocation, which won’t affect the planned start of the new pipeline, Amieyeofori said.


Source: Business Day