FG loses $1.9bn to Shell shutdown of Trans Ramos pipeline
Chibisi Ohakah, Abuja
The Federal Government is believed to have lost over $1.9 billion from crude oil sale since the shutdown of the Trans-Ramos Pipeline eight months ago by Shell Petroleum Development Company. Shell announced last year that it had to shut down production following the discovery of leaks on the pipeline, which is located in the swamps of the Niger Delta.
Shell is the operator of a Joint Venture, JV involving the Nigerian National Petroleum Corporation (NNPC), which holds 55%; Shell, 30%; Total 10%; and Agip Oil 5%. The Trans-Ramos Pipeline, which supplies crude oil to the SPDC JV-owned Forcados export terminal, has a capacity of around 100,000 barrels per day.
Investigations reveal that the decline of 100,000 bpd in the nation’s oil exports in eight months meant a loss of $1.90bn or N684bn. Bonny Light, the nation’s reference crude grade, traded at an average of $75.38, $74.72, $73.35, $79.59 and $79.18 per barrel in June, July, August, September and October respectively, according to a Central Bank of Nigeria, CBN data last on Thursday
The Trans Ramos pipeline had been repaired but had yet to come back on stream as it was undergoing extensive testing prior to restart, a source from Shell told newsmen in Abuja. It said statutory post-joint investigation visit activities were ongoing, which included site assessment, remediation, and payment of compensation to the people and communities impacted by the spills.
However, a Shell spokesperson, Mr Bamidele Odugbesan, told newsmen recently that the pipeline will definitely come back on stream but that he is unable to give precise timing yet for the restart of the line, as that will come after the post-repair testing had been concluded.
“As soon as clean-up and site assessment are completed, we are committed to starting the immediate remediation of the impacted areas in Aghoro and Odimodi,” he said, adding that details of the cause and impact of the spills will be captured in the JIV reports, which will be released after sign-off by all parties.
Shell said in August it recovered over 95% of spilt oil from the recent spill incidents on sections of the pipeline in Aghoro community, Bayelsa State, and in Odimodi community in Delta State. The firm said the pipeline had remained shut since the incidents.