Seplat Faces Headwinds From Trans-Forcados Pipeline - Africa’s premier report on the oil, gas and energy landscape.

Seplat Faces Headwinds From Trans-Forcados Pipeline

Nigerian independent Seplat Petroleum resumed production in late April 2014 after 36 days of forced shut-in. So did the NPDC/Shoreline Natural Resources Joint Venture.

The producing wells from these two operations were down due to Trans-Forcados terminal loading line leak which happened on March 4, 2014, according to data available at the Department of Petroleum Resources (DPR), the country’s regulatory agency.

Seplat ordinarily produces around 60,000BOPD from Oil Mining Leases (OMLs) 4, 38 and 41, in the Western Niger Delta. NPDC/Shoreline Resources does about 45,000BOPD from OML 30. “OML 30 Station was down with 32 strings due to TFP leaks”, DPR sources explain

Heritage Oil, the British explorer which owns an effective working interest of 30.71% in OML 30, hinted at the challenge in its ‘outlook for 2014’, published in its 2013 annual report. But the story was hidden in plain sight. “As a result of an enforced shut-in at OML 30 during the first quarter of this year, total production, net to Heritage, for 2014 is estimated in the range of 14,500-18,000 BOPD”, the report said.

Seplat sources say the company will report the losses in its quarterly report, the first one it would publish since it got listed on the London and Nigeria Stock Exchanges in April 2014. “Reporting that you shut in for 36 days isn’t the most endearing way to start addressing an investor audience”, says Sam Ojibua, an Africa focused oil and gas analyst, “but that’s why you’re a listed company; to be open, transparent”.

Seplat has a back- up plan to mitigate the losses arising out of vandalism of the Trans- Forcados pipeline. “When this shut-in happens again it will not affect us”, company officials say.  Seplat has almost completed a 10 kilometre pipeline to state company NNPC operated Warri Refinery, to which it will deliver its equity crude from OMLs 4, 38 and 41. The payment will be by crude swap. NNPC is having challenges of frequent vandalism on its own 67 kilometre crude transport pipeline to Warri Refinery, so the arrangement is a win-win.

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1 comment

  1. Thank you for sharing your info. I really appreciate your efforts and I am waiting for your next
    post thank you once again.

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