Neconde Targets Evacuation of 60,000bpd of Crude by Barges

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Following the incessant vandalism of Trans-Forcados Pipeline (TFP), which feeds the Forcados export terminal in Delta State, Neconde Energy Limited, the exploration and production subsidiary of Obijackson Group, has unveiled plans to evacuate 60,000 barrels per day of crude via barges from Oil Mining Lease (OML) 42 by the end of 2017.

Speaking to journalists on the dispute between the company and the host community of Gbaramatu in Delta State, the Managing Director of the company, Mr. Frank Edozie stated yesterday in Lagos that the Trans-Forcados Pipeline has become unreliable for crude evacuation as a result of incessant vandalism.
According to him, Neconde bought OML 42 in 2012 with the objective of hitting a production target of 100,000 barrels per day of crude oil.

Edozie added that when Neconde expressed interest to acquire the asset, the expectation was that it would also inherit the operatorship from Shell.
“That was the basis on which the bid was made and that was the basis on which the asset was acquired. But shortly after Neconde emerged the winner, the federal government changed the goal post and assigned the operatorship to the Nigerian Petroleum Development Company (NPDC). It was only in February 2017 that Neconde and NPDC came together to form Asset Management Team that is responsible for the operatorship of the asset,” he explained.

Edozie also pointed out that the OML 42 could not produce crude from Trans-Forcados pipeline from February 13, 2016 to the first week of June 2017 because of the vandalism of the pipeline.

“The target during acquisition was 100,000 bpd but because there was no production from February 13, 2016 to June 2017, all the projections failed. The pipelines were down but we had to service bank loans. So, we had to take unusual measures to service the loans. OML 42 sits on swamps. So, we developed a method of producing oil into barges, that is sea-going tankers that take the crude into ships where ocean-going tankers will go and lift the crude. So, instead of producing 100,000 bpd, we were producing between 15,000 bpd and 17,000 bpd,” Edozie said.

He said the company would evacuate 45,000 bpd in the next two months when its barging operation becomes fully operational and 60,000 bpd by the end of this year.
Edozie revealed that TFP has never evacuated crude for two weeks without any interruption, adding that the pipeline has failed several times since it came back on stream on June 7.

“What we have done is to look at the TFP as an unreliable evacuation line. Our target is to become independent of TFP and Forcados export terminal,” he added.
He further stated that despite these challenges, the company still engaged the company to get Freedom to Operate.
“It came as a surprise to hear that Gbaramatu Traditional Council said that they are entitled to five per cent equity in the asset.

There was no such agreement; no such consideration and no such document assigning such equity to the community. The claim is totally unfounded and has no basis. We have invited the community or any individual with such document to come forward. We had a meeting with the community at Okporoza and what became obvious was that they have a number of grievances. The outcome of the meeting is that we now have a basis of understanding. We have ongoing dialogue and the dialogue with make them understand the realities and also help us understand their grievances,” Edozie added.