… increase power supply by 2,000mw power
Revenue to Federal Accounts may increase by about N180billion in December with the resumption of about 300,000 barrels per day (bpd) Trans-Forcados Pipeline (TFP) export terminal in Delta state at the current rate of $50 per barrel baring further attacks on the facility.
Market sources say that Royal Dutch Shell along with Axion Energy Argentina SA and Pampa Energia SA, have concluded arrangement for 1million/bbl of Forcados crude grade set to be sold in November futures market.
Analysts say the attack on the facility shrank gas production in Nigeria to 601mmscf/d from the usual 1.1bcf/d production resulting in the loss of about 2,000megawatts of electricity. This capacity coming back on stream is mitigating the shortfalls in gas supply due the October 25 attack on the gas section of Chevron’s 439 kilometre Escravos-Lagos pipeline system (ELPS)
Also, the resumption of Forcados terminal has helped Nigeria ramp up production from 1.6million bpd to 2million bpd.
Analysts say it is a positive move for Nigeria who was granted exemption from supply cap agreement reached by Organisation of Petroleum Exporting Countries (OPEC) to shore up oil prices that have fallen by over half of 2014 levels.
“Nigeria’s current output of 1.8 million barrels per day will see a rise with Forcados to 2million bpd,” said Giovanni Staunovo, commodity analysts at UBS Wealth Management.
Industry sources say it may take up two weeks to resume full loading as preparatory activities including cleaning the terminal is on-going.
“Nigeria’s Forcados export pipeline undergoing cleaning, testing after repairs. The work is to be concluded Wednesday,” said Staunovo.
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Shell declared a force major ( a legal clause that allows it stop shipments without breaching contracts) on the crude grade one week after the export line was attacked by militants calling themselves Niger Delta Avengers in February.
As a result of the attacks and the consequent low oil prices, Federal Government revenues and those of companies making use of the terminal.
“These attacks are hurting the economy so all options, channels and considerations should be made to stop the spreading ripple,” said Chijioke Mama, founder and CEO of EnergyDatar an advisory firm in an e-mail response.
Federal Government revenue in September was reduced by about 12% from August to N279.75 billion ($8 billion), according to Kemi Adeosun, finance minister.
She also stated that despite the rally in global oil prices averaging $48.43/b in June, Nigeria’s export volume declined by 1.15 million barrels in that month, resulting in a $46.52 million drop in oil export sales for the government.
Seplat Petroleum Development Company Plc published 9 months results in 2016, reflected obvious challenges from shut-ins in the Trans Forcados Pipeline (TFP). Sales declined 51.7% YoY to $202.7 million due to a 66% decline in crude revenue after lifting adjustments to $127 million.
Gross profit for the period was 61.5% lower on a year ago basis to $73.9 million. Similarly, the company reported Loss before and loss after of $87.6 million and $97.7 million respectively this is against PBT ($68.4 million) and PAT ($68.6 million) over the same period in 2015.