FG Moves to Revive Inactive Oil Wells to Meet Nigeria’s OPEC Oil Quota
Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has inaugurated a project committee on reactivation of shut-in strings (inactive oil wells) in the country.
The overall objective, officials said, is to boost the country’s crude oil production. This is coming at a time Nigeria’s crude oil production output had fallen from 2.5million barrels per day to the present 1.42million barrels per day as of May 2022.
This is due to various reasons that include pipeline vandalism, shutting of many oil wells because of lack of evacuation, investment and others, a report said.
At the inauguration of the committee on Thursday in Abuja, the chief executive officer of NUPRC, Mr. Gbenga Komolafe, said it would conduct an industry-wide technical integrated study on reactivation of the shut-in strings.
Komolafe said the nation had suffered significant losses in crude oil production especially in land and swamp terrains due to economic sabotage popularly known as crude oil theft, some of which has led to the declaration of force majeure at Bonny Oil and Gas Terminal (BOGT).
Komolafe said the shut-in of wells from fields evacuating through the Nembe Creek Trunk Line (NCTL) and the Trans Niger Pipeline (TNP) as another consequence.
“A consequential effect of this menace is that the nation only achieved about 60% compliance 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 government and investors is a deep cause for concern for all stakeholders.
“The challenges that stem from this issue include threat to national and energy security, erosion of global competitiveness and ease of doing business and rise in unemployment across the industry.
“Others are, increase in conflicts due to proliferation of arms and widespread HSE and community concerns,’’ Komolafe.
Komolafe said that the NUPRC has developed regulatory initiatives and optimization to tackle these mentioned issues and meet the government’s production target of 3 million barrels of crude oil per day.
He said it developed strategies which involved industry stakeholders 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 showed 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 factor.
What you should know
Nigeria has been struggling to meet up with its approved OPEC crude oil quota with an alleged average oil output of 1.24 million barrels per day in the month of March amid reports of increasing cases 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.