FG moves to revive inactive oil wells to meet…

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FG moves to revive inactive oil wells to meet…

Nigeria loses $4 billion annually to oil theft  – NUPRC

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has moved to boost the country’s crude production with the inauguration of the Committee on Reactivation of shut-in strings (inactive wells).

This is coming at a time Nigeria’s crude production had fallen from 2.5 barrels per day to the 1.42 million barrels per day as of May 2022, due to various reasons that include pipeline vandalism, shutting of many wells because of lack of evacuation, investment and others.

At the inauguration of the committee on Thursday in , the Chief Executive of NUPRC, Mr Gbenga Komolafe, said it would an -wide technical integrated study on reactivation of the shut-in strings.

Komolafe said the nation had suffered significant losses in crude production especially in land and swamp terrains due to sabotage popularly known as crude theft, some of which has led to the declaration of force majeure at Bonny Oil and Gas Terminal (BOGT).

What the NUPRC boss is saying

Komolafe said the shut-in of wells from fields evacuating through the Nembe Creek Trunk Line (NCTL) and the Trans Pipeline (TNP) as another consequence.

He said, “A consequential effect of this menace is that the nation only achieved about 60% with Technical Allowable Rate (TAR) and 72% of its assigned OPEC quota.

“On the other hand, the socio-economic impact of production and associated revenue losses to both and investors is a deep cause for concern for all stakeholders.

“The challenges that stem from this issue include to national and energy security, of global competitiveness and ease of doing business and rise in unemployment across the industry.

“Others are, in conflicts due to of arms and widespread HSE and community concerns.’’

FG develops strategies to tackle economic sabotage and meet production target

Komolafe said that the NUPRC has regulatory initiatives and optimization to tackle these mentioned issues and meet the government’s production target of 3 million barrels of crude per day.

  • He said it developed strategies which involved industry and cut across techno-socioeconomic and security initiatives aimed at decreasing the menace to the barest minimum in the short run and eventual elimination in the long run.
  • He added, “It is my utmost belief that the impact of these joint strategies would be felt across the industry in a few months.’’
  • Against this backdrop, he said the initiative to conduct an industry-wide integrated study on the reactivation of shut-in strings was conceptualised in NUPRC and approved by him as a low-hanging strategy to gain incremental production.
  • He said its analysis that the country had over 3,000 shut-in strings in-country with huge potential to boost production in the short-term (six months), mid-term (one year) and long-term (over a year).
  • He tasked the committee which has one month to conclude its work to develop empirically driven criteria to identify candidate wells for production ramp-up in the short, mid and long-term and identify candidate reservoirs/fields with the potential to increase recovery .

What you should know

  • Nigeria has been struggling to meet up with its approved OPEC crude quota with an alleged average oil output of 1.24 million barrels per day in the month of March amid reports of increasing of crude oil theft and pipeline vandalism.
  • The country’s crude oil production witnessed increasing production levels in the month of May rising to an average of 1.42 million bpd in May.
  • This is against the backdrop of OPEC’s announcement of an increase in Nigeria’s oil production quota from the 1.735 million barrels per day target approved in May 2022 to a new target of 1.772mbpd for June 2022

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