Analytics

Nigerian oil output at risk from coronavirus as cases at offshore oil fields rise

London — The rising number of coronavirus cases among workers at Nigeria’s offshore oil fields and platforms is a growing concern for Africa’s largest oil producer, with disruption to output likely, sources say.

Source: S & P Global Platts, by Jonathan Dart

Maintenance at the offshore Bonga oil field has already been disrupted after the operator, Shell, was forced to evacuate workers due to a coronavirus outbreak, sources close to the matter said on June 24.

Nigeria’s upstream regulator, the Department of Petroleum Resources, said a growing number of workers were being diagnosed with coronavirus at offshore and remote oil locations and expressed fears it might disrupt production.

The DPR did not, however, name the fields affected, but blamed the outbreak on personnel not adhering to the rules and guidelines before leaving got offshore oil locations.

“Consequently…no personnel (including government authorities) shall be permitted to embark to offshore/remote locations in the oil and gas industry without being fully subjected to established protocols,” DPR said in a statement.

“Furthermore, all operators are to ensure that evidence of compliance with the protocols by personnel travelling to offshore/remote locations is duly documented,” the agency added.

Offshore production accounts for more than 60% of Nigeria’s 2.10 million-2.20 million b/d crude and condensate output.

Bonga evacuation

Earlier this week, Shell began evacuating workers from the Bonga floating, production, storage and offloading unit after some of them contracted coronavirus, resulting in the maintenance program being halted.

The 225,000 b/d Bonga FPSO had been partially shut since late-May for repairs which were expected to run until July, according to Shell’s local subsidiary Nigeria Exploration and Production Co.

“The affected workers were suspected to have contracted the disease at the port of Onne en route to the Bonga FPSO vessel. The disease was rampant at the Onne Port,” a source said.

The port of Onne, Rivers state, is the main base from where a large number of supply vessels operate to and from offshore facilities.

Shell was not immediately available for comment.

The local Access Bank confirmed Monday the closure and disinfecting of its branch at Onne Port, following the death on June 17 of one its employees from coronavirus.

The 225,000 b/d Bonga field was operating at around 95% of capacity before it was shut down in May, according to S&P Global Platts estimates.

Shell earlier postponed the routine maintenance at Bonga from March and April due to the coronavirus pandemic.

Nigeria, Africa’s biggest oil producer has recorded 21,371 cases of coronavirus, with 930 reported in Rivers State, according to the most recent government figures.

OPEC+ cuts

This comes as Nigeria was starting to cut its crude output in line with its OPEC+ obligations.

Nigerian oil officials have said the OPEC member will comply fully with its quota by mid-July.

Earlier this month, Nigeria National Petroleum Corp’s group managing director, Mele Kyari, said the country pumped nearly 100,000 b/d of crude above its OPEC quota of 1.412 million b/d.

Kyari said this was because of technical difficulties in shutting its aging oil wells quickly enough.

According to the latest S&P Global Platts OPEC+ survey, Nigeria produced nearly 300,000 b/d in excess of its 1.412 million b/d quota in May.

The OPEC+ group led by Russia and Saudi Arabia agreed on June 6 to extend tough output restrictions begun in May in response to the coronavirus pandemic and plunging oil prices.

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