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Nigeria’s Bonny light under pressure of crude oil price decline

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crude-oil-price-jan-5* Shell sells Nembe Creek Trunk Line, OML29 to Nigerian firm

NIGERIA’s crude oil grade, bonny light is under pressure of price decline and insufficient export, due to force majeure regularly declared by Nigerian oil companies as a result of vandalism.

Besides, the Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Royal Dutch Shell Plc, has sold Oil Mining lease (OML) 29 and the Nembe Creek Trunk Line (OML29 and NCTL) and related facilities in the Eastern Niger Delta for $1.7 billion.

The company said in a statement yesterday, that its interests in OML 29 and the Nembe Creek Trunk Line were assigned to Aiteo Eastern E&P Company Limited.

The price of Organisation of Petroleum Exporting Countries (OPEC) basket of twelve crudes, including Nigeria’s bonny light has dropped to $50.92 a barrel on Tuesday, compared with $83.50, $80.42 and $63.28 per barrel it recorded in October, November and December last year.

The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).

Bonny Light crude oil is produced in Nigeria from Chevron and Shell concessions. Chevron’s exports are throughput and loaded from the Shell-operated Bonny Terminal, which can accommodate very large crude carrier (VLCC) loading.

The typical cargo size is 950 thousand barrels; however, alternate cargo sizes can be arranged with advance planning.

Meanwhile Shell said that the divestment was part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government of Nigeria’s aim of developing Nigerian companies in the country’s upstream oil and gas business.

It stated: “Shell has been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there – both onshore and offshore. Through SPDC and its other Nigerian companies, Shell responsibly produces the oil and gas needed to help fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.

“OML29 covers an area of 983 square kilometres and includes the Nembe, Santa Barbara and Okoroba fields and related facilities. The Nembe Creek Trunk Line is 100 kilometres long and has a capacity of 600 thousand barrels per day. It was commissioned in 2010 and evacuates crude to the Bonny Crude Oil Terminal (BCOT). BCOT is not part of the transaction and will remain owned & operated by the SPDC JV. The divested infrastructure includes flow stations together with associated gas infrastructure plus oil and gas pipelines within the OML. The divested fields produced on average around 43,000 barrels of oil equivalent per day (100 per cent) during 2014.



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