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NCTL Force Majeure: Nigeria loses over $75m in 8 days

Nigeria’s quest to meet its 2.3 million barrels per day (bpd) oil production target for 2019 suffered a huge setback as the country has lost about seventy five million five hundred and four thousand dollars ($75,504,000) in eight days over a force majeure declared on one of the country’s major export line- Nembe Creek Trunk line (NCTL).

The NCTL is a 97 kilometer pipeline with a capacity to pump 150,000 bpd. At an oil price of $62.92 per barrel, that translates to $75,504,000. NCTL, which exports Bonny Light crude oil, was shut down and placed under force majeure last week, a spokesman for operator Aiteo said on Tuesday.

The spokesman did not give a reason for the shutdown. The pipeline is one of the two major export pipelines that exports Bonny Light. The terminal is currently loading only from the Trans Niger Pipeline (TNP), a spokesman for terminal operator Shell said.

The NCTL has gained attention as a favourite of oil thieves, who routinely hack into the line, creating as many as 24 illegal bunkering points that require constant plugging.

Aiteo, Eroton and Newcross, three Nigerian independents which evacuate their crude through NCTL, lose as much as 40 per cent of the crude routinely to oil thieves. The NCTL has witnessed over 10 breaks this year, forcing the operator-Aiteo to declare force majeure on the pipeline.

Speaking to Daily Sun in a telephone interview,  a stakeholder who is familiar with the operations of NCTL, lamented the continued attack on the asset, saying it remained worrisome that Government appears to be helpless.

‘‘This is a critical national asset. But I am worried that Government and other security agencies have failed to nip this monster in the bud as it continues to milk the companies operating on that line, huge resources to fix these break points whenever it happens.’’

The Nigerian National Petroleum Corporation (NNPC) in its  Monthly Financial and Operations Report (MFOR) for the month of June announced that, it recorded a 77 per cent rise in cases of oil pipeline vandalism in its network of pipeline infrastructure.

The corporation reports that 106 pipeline points were breached, representing an increase from the 60 points vandalized in May 2019.