By Gladys Nweke
Two years after Shell’s loading terminal in the area was forced to shut down over community dispute, Federal Government has authorized Belema Oil, an indigenous oil firm, to operate a new floating crude oil export terminal off the coast of Kula.
Belemaoil Producing Ltd has been allowed to moor a floating storage and offloading (FSO) unit and use it as a crude oil export terminal, according to a letter signed by the Director of Nigeria’s Department of Petroleum Resources (DPR), Mordecai Ladan.
Shell Petroleum Development Company (SPDC) operated a similar facility in the area but was forced to shut down by the locals in 2017.
Shell said the Federal Government has lost about $700 million since its facility in the area was forced to shut down.
The new terminal, which will be known as Belemaoil Terminal Kula, is expected to create more than 10,000 jobs and other opportunities for the unemployed youths in the area, according to Samuel Abel-Jumbo, External Relations Manager at Belemaoil.
Not all local communities in the Niger Delta have been happy with the major international oil companies operating in their region, and Nigeria’s oil industry has frequently suffered sabotages, oil theft, vandalism, and militant attacks on infrastructure.
Nigeria is African’s largest oil producer and an OPEC member, is dusting off an ambitious plan to double its oil production by 2025, aiming to pump as much as 4 million bpd in six years’ time—a goal that analysts think may be too ambitious for the country to achieve without reforming its oil sector through the Petroleum Industry Bill (PIB) that has been on the floor of the parliament for 18 years.
Nigeria currently pumps around 2.2 million bpd in crude oil and condensate. In April, Nigeria’s crude oil production alone stood at 1.819 million bpd, up by 92,000 bpd from March, according to OPEC’s secondary sources.
Nigeria may have a hard time achieving its ambitious oil production goal because of security concerns and the continuous oil theft and resulting oil spills in the Niger Delta that have been affecting the operations of supermajors like Shell and Exxon.
At the end of last month, sabotages and oil leaks led to several operators declaring force majeure on key oil export grades, including Shell declaring force majeure on Bonny Light exports.