Nigeria’s Crude Production May Dip As Aiteo Shuts 50,000bpd OML 29

Nigeria’s crude oil production is expected to dip further as Aiteo Eastern Exploration and Production Company (AEEPCO) has shut its Oil Mining Lease (OML) 29 field in Bayelsa State with nearly 50,000 barrels per day of output, after detecting a leak, the company said on Wednesday.

Aiteo Eastern E&P said the leak was reported on Monday during routine operations in the Nembe area of Nigeria’s oil-rich Bayelsa State.

The facility, which operates under the NNPC/Aiteo Joint Venture, was closed down on Monday following a leak detected during routine operations.

The OML 29 field, which has 11 oil and gas fields, including four producing fields, currently producs over 120,000 barrels of oil per day. The shutdown is expected to significantly reduce Nigeria’s daily crude oil production, which currently stands at about 1.5 million barrels per day.
The Nembe Creek facility is the largest of 11 fields under an oil mining lease operated by Aiteo, which also produces significant natural gas volumes that supply the Nigeria Liquefied Natural Gas (LNG) plant at Bonny Island.

The leak’s cause was undetermined, Aiteo said, adding that the shutdown was precautionary while it contained the spill. Aiteo said it has notified regulators.

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Aiteo’s group managing director, Victor Okoronkwo, said a Joint Investigative Visit (JIV) with stakeholders had been initiated to determine the cause of the incident. He stressed that the company’s current priority is to expedite an efficient spill management process in line with regulatory standards and collaborate with all stakeholders to restore production and mitigate associated risks.

The development comes amid growing tension between Aiteo and its host community, Nembe Kingdom, over issues such as the neglect and abandonment of the Nembe Independent Power Project and allegations of environmental abuse without cleanup and remediation. The Nembe Creek Trunkline, which contributes 150,000 barrels per day of higher-grade crude to Nigeria’s daily oil production figures, is also at risk due to the faceoff.

The Nigerian National Petroleum Company (NNPC) Limited and regulatory bodies have been notified about the incident, and efforts are underway to contain the spill and restore production. However, the shutdown is expected to further shrink Nigeria’s earnings from oil production, which has already been impacted by a decline in global oil prices.