Nigeria, Shell lose $250million in deferred revenue to Bonga oil field closure

April 05, 2017 | Company Operations, Deepwater, Nigeria

Lagos, Nigeria | – The Nigerian government and Shell Nigeria Exploration and Production Company Limited (SNEPCo) a subsidiary of Royal Dutch Shell Plc have lost about $250 million since March 4, when the oil super major commenced the turnaround maintenance of the Bonga deepwater oilfield, where statutory activities are being executed to ensure continuous optimum operations at the field, reports local newspaper ThisDay.

Investigations revealed that the 225,000 barrels per day capacity oilfield was producing about 150,000 barrels per day before it was shut down. A source close to the deepwater facility said on condition of anonymity at the weekend that apart from the cost of the maintenance, which runs into millions of dollars, the oil giant and the Nigerian government have lost about $250 million oil revenues as a result of the closure of the production facility.

“Oil production is deferred as a result of the current exercise. That means that about $250 million of oil revenue has been deferred as well based on oil price of $50 per barrel. But this is not actually a loss because it is not stolen crude. It is deferred and this means that the revenue, which should have been earned now, will be earned in the future because the crude is still in the ground,” he explained.