After three years of shutdown over rampant theft and related damage, Nigerian independent producer Belemaoil Producing has resumed operations at Oil Mining Lease 55, Reuters reported on Monday, citing the company.
Located about 40 km west of the Bonny oil export terminal, Belemaoil acquired OML 55 from Chevron Corp. in 2015. However, the company was forced to suspend operations in 2021 due to persistent oil theft.
According to the company, the block contains five oil fields that produce about 14,000 bpd as well as more than 70 million standard cubic feet of gas per day.
Nigeria has been struggling with rampant oil theft. Two years ago, Nigerian National Petroleum Company Limited (NNPCGROUP) CEO Melee Kyari revealed that Africa’s largest oil producer was losing nearly all the oil output at oil hub Bonny, the town after which its premium oil grade Bonny Light is named. Bonny Light is a light-sweet crude oil grade produced in Nigeria and an important benchmark crude for all West African crude production. Bonny Light has particularly good gasoline yields, which has made it a popular crude for U.S. refiners, particularly on the U.S. East Coast.
The NNPCL and the Ministry of Petroleum have estimated that the country loses 200,000 to 400,000 barrels of crude per day. Those are enormous figures considering that Nigeria’s crude production averaged 1.35 million barrels per day in August, below its OPEC quota of 1.5 million b/d. With a barrel of Bonny Light currently changing hands at $78.62, good for a premium of $1.08 to Brent price, Nigeria is losing billions of dollars every year to oil theft.
Meanwhile, hordes of oil and gas majors have exited the Nigerian market in recent years with their timing curious considering they are leaving a few years after the country opened its doors to wider exploration courtesy of the Petroleum Industry Act (PIA) 2021. The latest development came in November when Norwegian oil and gas giant Equinor ASA finalized the sale of Equinor Nigeria Energy Company (ENEC) to local firm, Chappal Energy.
