Belemaoil Producing, a Nigerian independent oil producer, has restarted operations at its Oil Mining Lease (OML) 55 after a prolonged three-year hiatus following significant damage caused by rampant oil theft. This marks a crucial development in the Nigerian oil sector, which has been beleaguered by theft and sabotage in recent years, affecting production and investor confidence.
Belemaoil, which acquired OML 55 from Chevron Corporation in February 2015, had to halt operations in 2021 due to widespread theft from the delivery line transporting crude to the Bonny oil export terminal, a strategic hub in the Niger Delta. Located approximately 40 km west of Bonny in a swamp-to-shallow water area, OML 55’s shutdown mirrored the challenges facing Nigeria’s onshore oil operations.
A spokesperson for Belemaoil stated, “The resumption of operations at OML 55 is a significant step forward, following the arrival of a floating oil storage vessel on October 6. This milestone underscores our commitment to restoring production and stabilising output.”
OML 55 contains five oilfields, producing approximately 14,000 barrels of oil per day, alongside an impressive output of over 70 million standard cubic feet of natural gas per day. Despite its potential, the oil block has been fraught with vulnerabilities, particularly along the delivery pipeline, where illegal tapping of crude for sale in the illicit oil market has been rampant.
The resumption of production comes as part of Nigeria’s broader efforts to reinvigorate its oil sector. The country, Africa’s largest oil producer, has faced dwindling crude output due to large-scale theft and sabotage. This has prompted major oil firms to scale back onshore activities, refocusing their efforts on deepwater projects less prone to theft and disruption.
The Nigerian government has been striving to curtail oil-related criminal activities, but the resurgence of onshore production remains precarious. Belemaoil’s reopening of OML 55 represents a critical test case for the feasibility of continued onshore oil production in the face of these endemic challenges.
