Nigeria’s total daily oil output could take a brief drop for maybe a month following 

announcement by the Shell Nigeria Exploration and Production Company Limited (SNEPCo) that it has shut the 225,000 barrels per day capacity Bonga Floating Production Storage and Offloading (FPSO) field for routine repairs. Chineme Okafor writes

Penultimate week, Shell Nigeria Exploration and Production Company Limited (SNEPCo) announced that it had shut down the Bonga deep-water oilfield and commenced turnaround maintenance on it, thus executing mandatory upkeep activities that would ensure continuous optimum operations at the field.

Accordingly, the turnaround maintenance would involve inspections, recertification, testing and repair of equipment as well as engineering upgrades with Nigerian companies and subsea professional playing key roles.

As expected, the routine maintenance will take off a significant volume from Nigeria’s crude oil production and exports. SNEPCo under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC), produces about 200,000 barrels of oil per day in the 225,000 barrels per day capacity Bonga field.

However, a major focus of the maintenance would be the Bonga Floating, Production, Storage and Offloading (FPSO) vessel, which is at the heart of operations at the Bonga field. The FPSO has a production capacity of 225,000 barrels of oil and 150 million standard cubic feet of gas per day.

It also has a life-span of 20 years, and was shut down for six weeks in February 2011 for routine maintenance.

 Need for Maintenance

Speaking in a statement on the rationale for the shutdown, the Managing Director of SNEPCO, Mr. Bayo Ojulari, said the current maintenance of the field was the fourth since the Bonga field began production in November 2005, and that it offered the field a new opportunity to regroup its efficiency.

Ojulari said: “The exercise will help ensure sustained production and reduced unscheduled production deferments.”

According to him, “For the Bonga team, this is another opportunity to excel, having won the ‘Asset of the Year’ Award 2016 in the Shell Group, followed by runners-up in Norway and Malaysia. We are pleased that the award recognised the continuing collaboration towards optimum production with a focus on safety, cost and Nigerian content development which will be invaluable in the maintenance work.”

Similarly, Shell Nigeria spokesman, Mr. Bamidele Odugbesan, said that production from the field was shut down on March 4, 2017, and would be expected back at the conclusion of the exercise next month. 

Potential Implications

Without much doubt, the development would mean that Nigeria will have to defer producing up to 200,000 barrels of oil a day for as long as the field remained closed for the repair works.

This also implies that the country’s production level, which the NNPC last week said has climbed up to 2 million barrels a day following reduced militancy and disruption of operations in the Niger Delta, could drop by the shut-in volume.

This could also delay, albeit momentarily, Nigeria’s desire to quickly get back to a healthy oil production level in line with the expectations of member countries of the Organisation of Petroleum Exporting Countries (OPEC) when they granted it a freeze waiver during their meetings to shore up oil prices through production cuts.

On the revenue side, operators of the field would for the period of the repairs, defer income that could have come from its production, while gas produced from the field for both domestic and international consumptions would also be impacted.

Bonga Field

Located in Oil Prospecting Licence (OPL) 212, the oil field which is reportedly situated 60-square-kilometre in water depths of over 1,000 metres is Nigeria’s first deep-water development project.

It is also located 120 kilometres off-shore Nigeria, and has a development cost to first oil of about $3.6 billion.

Using cutting edge technology, SNEPCo made a world-class oil and gas find at its offshore Bonga in 1995, and the Bonga FPSO was built by Samsung Heavy Industries of Korea for SNEPCo.

The production facilities of Bonga consist of one of the world’s largest FPSO vessels and deep-water subsea infrastructure. Its initial 16 subsea oil producing and water injection wells were connected to the two-million barrel storage capacity FPSO by production flowlines, risers and control umbilicals.

Also, the use of Inconel clad Steel Catenary Risers in Bonga was the first time such facility was used on any FPSO anywhere in the world.

Subsequently, SNEPCo expanded the project with further drilling of wells in Bonga Phases 2 and 3 and through a subsea tie-back that unlocked the nearby Bonga North West field in August 2014. Bonga Phase 3 achieved first oil in October 2015.

At the moment, SNEPCo operates Bonga in partnership with Esso Exploration and Production Nigeria (Deep Water) Limited, Total E&P Nigeria Limited, and Nigerian Agip Exploration Limited under a PSC with the NNPC.

Source: This Day


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