As part of efforts by the Nigerian Government to shore up crude oil production to meet its Organisation of the Petroleum Exporting Countries (OPEC) target of 1.799 million barrels per day and to address persistent dip in the country daily crude production, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has inaugurated a Committee on reactivation of shut-in strings (inactive oil wells) to spur crude production, export and increase oil revenue.
The Committee headed by Mr. Amadasu Enorense, the Deputy Director and Zonal Operations Controller, NUPRC Owerri, was inaugurated by Engineer Gbenga Komolafe, the Commission Chief Executive (CCE), NUPRC, on Thursday in Abuja.
According to the NUPRC CCE, the team was inaugurated to conduct an industry-wide technical integrated study on reactivation of the shut-in strings.
EnergyDay had earlier reported that OPEC in its Monthly Oil Market Report (MOMR) for June, 2022, released last week, showed that Nigeria’s crude oil production declined by an average of 199,000 barrel per day in May 2022 to 1.024million barrels per day (mbpd) based on direct source and 1.262mbpd( secondary sources to OPEC) from April 1.219mbpd(direct source) and 1,306mbpd(secondary source).
However Mr. Komolafe during the inauguration ceremony further said that Nigeria had suffered significant losses in crude oil production especially in land and swamp terrains due to economic sabotage popularly known as “crude oil theft”.
According to him, the major consequence of this nefarious activity, was the declaration of force majeure at Bonny Oil and Gas Terminal (BOGT), adding that the shut-in of wells from fields evacuating through the Nembe Creek Trunk Line (NCTL) and the Trans Niger Pipeline (TNP) as another consequence.
The NUPRC CCE said,“A consequential effect of this menace is that the nation only achieved about 60 per cent compliance with Technical Allowable Rate (TAR) and 72 per cent of its assigned OPEC quota.
“On the other hand, the socio-economic impact of production and associated revenue losses to both government and investors is a deep cause for concern for all stakeholders.
“The challenges that stem from this issue include threat to national and energy security, erosion of global competitiveness and ease of doing business and rise in unemployment across the industry.
“Others are rising conflicts due to proliferation of arms and widespread HSE and community concerns,” Komolafe noted.
In the light of these issues and the government’s production target of three million barrels of oil per day in three years, he said the NUPRC developed regulatory initiatives and optimisation to tackle the menace.
He said it developed strategies which involved industry stakeholders and cut across techno-socioeconomic and security initiatives aimed at decreasing the menace to the barest minimum in the short run, and eventual elimination in the long run.
“It is my utmost belief that the impact of these joint strategies would be felt across the industry in a few months,’’ Komolafe added.
Against this backdrop, he said the initiative to conduct an industry-wide integrated study on the reactivation of shut-in strings was conceptualised in NUPRC and approved by him as a low hanging strategy to gain incremental production.
He said its analysis showed that the country had over 3,000 shut-in strings in-country with huge potential to boost production in the short-term ( six months), mid-term (one year) and long-term (over a year).
He tasked the committee to develop an empirically driven criteria to identify candidate wells for production ramp up in the short, mid and long-term and identify candidate reservoirs/fields with potential to increase recovery factor.
“The committee would engage industry stakeholders to get their buy-in on this strategic initiative.
“The committee has one-month 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 said.
Komolafe however charged Enorense, the team, to report to the Executive Commissioner, Development and Production on a weekly basis for the duration of the study.
Enorense, speaking on behalf of his team, assured the CCE and Nigerians of commitment to achieve the mandate of the Committee. He promised to ensure that all the inactive oil wells are revived to shore up the country’s oil quota and increase exports.