Belemaoil Producing, a Nigerian independent oil producer, has restarted operations at Oil Mining Lease 55 after a three-year shutdown due to severe oil theft and damage, Reuters reported on Monday.
Belemaoil, which acquired OML 55 from Chevron Corp. in 2015, is located approximately 40 kilometers west of the Bonny oil export terminal. The company was forced to suspend its operations in 2021 because of ongoing oil theft issues.
The oil block consists of five fields that collectively produce about 14,000 barrels of oil per day, along with more than 70 million standard cubic feet of gas each day.
Nigeria has been facing a major challenge with oil theft. Two years ago, Melee Kyari, the CEO of the Nigerian National Petroleum Company Limited (NNPCGROUP), stated that the country was losing almost all of its oil output at the Bonny oil hub. Bonny is known for its premium oil grade, Bonny Light, which is a light-sweet crude oil from Nigeria. This grade is highly sought after, particularly by U.S. refiners, due to its favorable gasoline yields.
The NNPCL and the Ministry of Petroleum estimate that Nigeria loses between 200,000 and 400,000 barrels of crude oil daily. This is significant, especially since the country’s crude production averaged 1.35 million barrels per day in August, which is below its OPEC quota of 1.5 million barrels per day. With Bonny Light currently priced at $78.62 per barrel—a premium of $1.08 over Brent—Nigeria is losing billions of dollars annually due to oil theft.
In recent years, several major oil and gas companies have exited the Nigerian market. This departure is noteworthy, considering it comes just a few years after Nigeria opened up to more exploration opportunities under the Petroleum Industry Act (PIA) of 2021. The most recent example is Equinor ASA, a Norwegian oil and gas giant, which completed the sale of Equinor Nigeria Energy Company (ENEC) to the local firm Chappal Energy in November.
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