Pan Ocean’s 67km pipeline portends higher revenue for government

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The Amukpe-Escravos Pipeline Project (AEPP), scheduled to be unveiled for use in June 2019 by Pan Ocean Oil Corporation, is a game changer that portends higher government revenue, analysts say.
The 67-kilometre pipeline, jointly initiated by the Nigerian National Petroleum Corporation (NNPC) and Pan Ocean, will evacuate crude oil from the northern fringe of the Niger Delta to Escravos export terminal.
Before the completion of the AEPP, the major evacuation pipeline available to producers was the Trans Forcados Pipeline (TFP), which was plagued by outages, disruptions and losses. Frequent ruptures and vandal disruptions made the pipeline unreliable, especially in the creeks and swamps, leading to huge revenue loss for Nigeria.
According to Stanley Mudjere, an energy analyst and lawyer, “It is always good to have an alternative, especially in the oil and gas industry that has become more volatile in Nigeria.
“If you consider the fact that the Trans Focardos Pipeline has suffered so much outages you know that an alternative is a welcome development. This pipeline will serve companies including Seplat, NPDC, Enageed, Summit, Newcross Petroleum, Continental Oil & Gas Pan Ocean PSC and boost government revenue.”
In the period between February 2016 and early 2017, disruptions on the Trans-Forcados Pipeline forced oil producers to lock-in output, a situation that caused the Nigerian government considerable budgetary strains, and for crude oil producers, lean bottom lines.
Trans-Forcados Pipeline was shut down for 305 days in 2016, and more than 182 days in 2017. In the 2006-2007 and 2009 periods, total crude deferred due to downtime of Trans-Forcados Pipeline by Pan Ocean alone was 16.2mmbbls, an equivalent of $812million (assuming a price of $50/bbl). In the 2016-2017 period, total crude deferred due to downtime was 3.7mmbbls, equivalent to $188 million. These losses applied to most of the