Nigeria’s federal government on Thursday inaugurated a 10-man expert team to work on a report preceding the reactivation of over 3,000 shut-in oil strings which have contributed to the country’s inability to produce its Organisation of Petroleum Exporting Countries (OPEC) oil quota.
In the oil industry, a production string is a part of an oil well which serves as the conduit through which fluid flows from the oil reservoir to the surface and is used to contain the liquids from contaminating the environment or eroding the other well structures.
For over a year , Nigeria has been unable to drill its full OPEC allocation, defaulting by as much as between 300,000 bpd to 700,000 bpd. Last month, it fell to a record low when the country produced just a paltry 1.024 million bpd of its over 1.750 million bpd ration.
But speaking during the event, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, noted that the move had become inevitable due to shut-ins arising from oil theft and sabotage in the Niger Delta.
Komolafe stated that the nation had suffered significant losses in crude oil production, especially in land and swamp terrains, a major consequence of which is the declaration of force majeure on the Bonny Oil & Gas Terminal (BOGT) and shut-in of wells from fields evacuating through the Nembe Creek Trunk Line (NCTL) and the Trans Niger Pipeline (TNP).
A result of the menace, he noted, is that the nation is only able to achieve about 60 per cent compliance with Technical Allowable Rate (TAR) and 72 per cent of its assigned OPEC quota.
On the other hand, Komolafe stressed that the socio-economic impact of production and associated revenue losses to both government and investors had become a deep cause for concern for all stakeholders.
The upstream chief executive reiterated that the development was causing a threat to national and energy security, erosion of global competitiveness and ease of doing business.
In addition, he pointed out that it had also given rise to unemployment across the industry, increased conflicts due to proliferation of arms as well as a widespread Health, Safety and Environment (HSE) and community concerns.
“In light of these issues and government’s production target of 3 million barrels of oil per day in three years, the NUPRC has developed regulatory initiatives and optimisation strategies aimed at decreasing this menace to the barest minimum in the short run, and eventual elimination in the long run.
“The strategies involves various industry stakeholders and cuts across techno-socioeconomic and security initiatives. It is my utmost belief that the impact of these joint strategies would be felt across the industry in a few months,” he assured.
Against this backdrop, Komolafe stated that the initiative to conduct an industry-wide integrated study on the reactivation of shut-in strings was conceptualised in the commission and approved by him as a low hanging strategy to gain incremental production.
“Our analysis shows that we have over 3,000 shut-in strings in-country with huge potential to boost production in the short term (i.e six months), mid term (i.e one year) and long term (i.e over a year),” he declared.
According to him, the committee would be saddled with the responsibilities to collect and quality-check data of all shut-in strings, evaluate the basis for shut-in based on subsurface (geology and reservoir engineering) and surface considerations.
In addition, the terms of reference of the committee includes , to develop an empirically driven criteria to identify candidate wells for production ramp up in the short, mid and long term.
It will also prioritise candidate reservoirs/fields with the potential to increase recovery factor in the short, mid and long term and develop a robust report with action and implementation steps.
“Additionally, the committee would engage industry stakeholders to get their buy-in on this strategic initiative. The committee has a one-month period effective today to conclude the study and revert to management with a robust report that will become a working document for the industry in this regard,” he noted.
Komolafe said that the team lead shall report to the executive commissioner, development and production on a weekly basis for the duration of the study.
The NUPRC chief executive listed Amadasu Enorense, a Deputy Director as the Team Lead and Georgeson Victor, Boma Atiyegoba, Dadi M.B, a Deputy Chief Geologist and Mumuni O.T as members of the committee.
Other members of the expert team are: Omion O.O, Namtari S.B, Uzoigwe F.F, and Mamman J.M while SShokoya Y.M is to act as Secretary of the committee.
Komolafe urged the team to carry out its mandate with all sense of responsibility and focus, bearing in mind the over-arching impact of the study outcome on the socio-economic well being of the nation.
While assuring of management’s cooperation and support throughout the study period, he explained that the initiative was one of several novel strategies that had been conceptualised in the commission and would be executed using in-house capacity.
“Other initiatives shall be unveiled in the coming weeks. It is important to note that the initiatives are the result of enormous in-house brain power and knowledge gathered from decades of regulatory oversight,” he added.
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