…management reports 1 dead, 7 missing, confirms three (3) crew members found alive
Olusola Bello
Trinity Spirit explosion in Nigeria provides a stark reminder of the vulnerability of supply installations especially in outage-prone countries such as Nigeria, Elliot Busby, an energy analyst with Rystard Energy has said.
He however stated that the explosion in Nigeria did not lead to any loss of oil production as the FPSO had not been producing since 2019 and was being used solely as a storage vessel.
The primary concern is the potential environmental implications of the situation, which will be hard to quantify until after the dust settles and the aftermath is assessed.
There is also one concern surrounding the tragedy, and this is the potential loss of life.
The Trinity Spirit floating production, storage and offloading (FPSO) vessel was positioned in the Ukpokiti field off the coast of Nigeria, where it has operated since 1999.
The vessel is capable of producing liquids at the rate of 22,000 barrels per day (bpd), it is likely that the unit has not been producing oil since 2019, and has been used solely for storage purposes.
The maximum liquid production rate for this vessel – 22,000 bpd – represents less than 2% of the total Nigerian crude oil production based on 2021 levels of 1.3 million bpd.
The Trinity Spirit was capable of storing up to 2 million barrels of crude oil, but it is unlikely that it was operating at full capacity or had full storage at the time of the incident.
The impact of the Trinity Spirit leak in terms of leakage is likely to be considerably lower than the most recent large offshore oil spill, the Deepwater Horizon crisis which leaked around 4.9 million barrels into the Gulf of Mexico in 2010.
The hull of the Trinity Spirit was originally built in 1976 and the latest upgrade took place in 1997, highlighting the age of the vessel.
The Trinity Spirit was at the end of its lifespan, which is a cause for concern for other similar vessels and operations in Nigerian waters as they operate in a region with minimal regulations.
The management of the company on Sunday provided further update on the missing crew members following the unfortunate explosion and subsequent fire that engulfed the FPSO Trinity Spirit at the Ukpokiti Terminal in the early hours of Wednesday, 2nd of February 2022.
“We can confirm that three (3) crew members have been found alive in the community and our priority is to ensure that they receive the appropriate medical attention they need.”
“Furthermore, in the early hours of Sunday 6th February 2022, one dead body was discovered in the vicinity of the FPSO. The identity of the dead body is yet to be ascertained. As earlier confirmed, the fire burnt out completely as of Thursday afternoon, 3rd Feb. 2022, thus enabling closer inspection of the vessel.”
“ A Joint Investigation Visit (JIV) with the relevant authorities, stakeholders and expert organizations took place on Saturday, 5 th February 2022. The focus of our joint efforts is to prioritise investigations towards establishing the whereabouts, safety, and security of the 7 crew members still missing, clean up and limit damage to the environment, and establish the cause of the explosion.”
“We appreciate the assistance provided by the Clean Nigeria Associates, the Chevron team, NOSDRA, NUPRC, SPDC, NIMASA and people in the community, particularly the fishermen, who have been of immense assistance since the incident occurred.
Members of the public should continue to keep away from the area while our Crisis Management Team monitors developments in the investigations and update all stakeholders with new information accordingly.”
Since the company’s inception in May 2004, Shebah Exploration & Production Company Limited (SEPCOL) has rapidly driven its growth by acquiring oil assets and using its strong in-house technical and operational expertise to grow production in a cost-effective manner. Asides from developing oil and gas business interests in other parts of Africa, within Nigeria, SEPCOL has a 40% interest in oil block OML 108.
Currently bidding on the acquisition of new oil and gas assets in Nigeria and also
reviewing interest in farm-in to certain assets in Nigeria.
The company is expecting to produce about 50,000bopd and about 300mmscf/day dry gas by year-end 2019.
OML 108 – Background & Field Description
OML 108 (formerly OPL 74) was awarded to Express Petroleum and Gas Company in December 1990. Express assigned 40% interest to Conoco Energy Nigeria Limited as Technical advisor. Conoco relinquished its 40% stake in the block in 2004 and transferred it to Shebah Exploration & Production Company Limited the same year.
OML 108 covers an area of 750sqkm in water depth of 88ft (30m) in the western edge of the Niger Delta in shallow water offshore Nigeria, six miles southwest of Chevron’s Meren field but reaches water depth of 700ft (213m) on the southern portion of OML 108.
The block is composed of oil-producing Ukpokiti field, Kunza discovery and deeper pool prospects in the southern portion of the block.
The Ukpokiti field comprising of 5 (five) oil wells and 1 injector well. Two exploration wells (Kunza-1 and Kunza-2) drilled in the Kunza discovery intersected commercial volumes of gas and condensate and will form the basis for coming appraisal, development and exploration effort. OML 108 holds significant leads towards the southern part of the block.
Meanwhile, Oil prices soared higher at the weekend, climbing above seven-year highs, as winter storms sweep across the US boosting demand for heating oil, supply concerns persist and financial players turn away from traditional tech stocks in favor of less volatile commodities.
Analysts say a spike towards $100 crude should not be ruled out in the short run, but downside risks are plentiful, including Omicron setbacks on demand, economic growth concerns and financial market corrections as the central banks fight inflation.
A tight supply environment is not helped by disappointing January production estimates from key producers Iraq and Russia.
The situation is not as dramatic as feared though, as production capacity in Middle East powerhouses Saudi Arabia, Kuwait and the UAE is there to boost production by at least 2 million barrels a day.
The production capabilities of Middle East players are kept in check by the current OPEC+ agreement that caps supply increases voluntarily, despite the market screaming out for more oil production.
Ukraine-Russia tensions remain in Eastern Europe and add an additional layer of risk to the global supply equation.
US troops moving to the region may add to the risk premium in oil prices as any risk of supply disruptions or sanctions on Russian flows are a critical factor in any trader’s mind.