Belemaoil Producing Limited, a leading independent oil producer in Nigeria, has resumed operations at Oil Mining Lease 55 (OML 55) after a three-year hiatus. The suspension, which began in 2021, was due to rampant oil theft and extensive damage to the facility. The resumption, announced on October 14, 2024, marks a significant milestone for both the company and Nigeria’s oil industry.
Background on OML 55
Located approximately 40 kilometers west of the Bonny oil export terminal, OML 55 is a critical oil block encompassing five oilfields. Belemaoil acquired the lease from Chevron Corporation in February 2015. Before the shutdown, the block had the capacity to produce 14,000 barrels of oil per day and over 70 million standard cubic feet of gas per day.
However, operations were disrupted by large-scale oil theft along the delivery line to the Bonny terminal, resulting in significant financial losses. The challenges forced Belemaoil to halt production to focus on addressing these issues.
Key Developments in Resumption
A major milestone in the resumption process was achieved on October 6, 2024, with the arrival of the first floating oil storage vessel at OML 55. This vessel is expected to play a vital role in stabilizing production and mitigating the risks of theft during transportation.
With operations now back online, Belemaoil aims to restore production levels to pre-shutdown capacity. The company’s efforts are expected to contribute significantly to Nigeria’s crude oil output, which has been declining due to theft and sabotage.
Implications for Nigeria’s Oil Industry
The resumption of operations at OML 55 is a positive step for Nigeria’s oil sector. It comes at a time when the industry faces mounting challenges, including large-scale theft and declining investment in onshore projects. Many oil majors have shifted their focus to deepwater production due to security concerns.
Belemaoil’s return to production demonstrates resilience and commitment to supporting Nigeria’s energy sector. It aligns with the federal government’s broader goals of revitalizing the oil industry, enhancing security measures, and boosting revenue generation.
Economic Impact
The restart of operations is expected to have far-reaching implications for Nigeria’s economy. It will not only increase crude oil production but also generate employment opportunities and stimulate economic activity in the Niger Delta region. Additionally, the increased output will contribute to national revenues, offering some relief to the government’s fiscal challenges.
Looking Ahead
Belemaoil’s successful return to OML 55 is a testament to the company’s dedication and strategic planning. As operations ramp up, the focus will remain on ensuring secure and efficient production while addressing ongoing challenges in the sector.
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