Shell Nigeria Exploration and Production Company Limited has commenced crude oil exports from the newly established Otakikpo onshore terminal. This marks the first crude cargo loaded from the $400 million facility, developed by indigenous operator Green Energy International Limited (GEIL), located in the OML 11 block near Port Harcourt.
The Shell Otakikpo terminal boasts a maximum export capacity of 360,000 barrels per day (bpd), positioning it as one of the largest onshore terminals in the country. Crude is transported via a 23-kilometer, 20-inch pipeline to a single-point mooring in the Atlantic, where Aframax and Suezmax tankers can load the oil. This infrastructure replaces a costly barging system that previously incurred around $120,000 per day in evacuation expenses.
According to GEIL’s Managing Director, Kayode Adegbulugbe, the new facility is expected to reduce production costs by at least 40%. He emphasized that the terminal offers a cost-effective, home-grown alternative to multiple floating storage units, aligning with the government’s strategy to enhance oil production efficiency.
Beyond its primary function, the Otakikpo terminal has the potential to unlock output from over 40 nearby fields with a combined capacity of 200,000 bpd and estimated reserves of 3 billion barrels of oil equivalent. The terminal can accommodate up to 250,000 bpd from third-party producers, including via a 6-inch, 6-kilometer offshore pipeline.
GEIL plans to expand storage capacity to 3 million barrels, up from the current 750,000 barrels, and can add tank storage within nine months if demand rises. Currently, utilization remains below 12%, indicating significant room for growth.
The Otakikpo project underscores Nigeria’s commitment to local content development. GEIL is fully indigenous-owned and operated, with about 40% of its operations team drawn from host communities. The company has invested in world-class training and capacity development programs, aiming to prepare local personnel for increasingly challenging career opportunities.
In terms of safety, GEIL has achieved a significant milestone by completing 3 million man-hours without a lost-time incident, reflecting its commitment to health, safety, and environmental standards.
The commencement of exports from the Otakikpo terminal comes at a critical time for Nigeria’s oil sector. Local producers now account for over 50% of the country’s oil production, up from 40% before the divestment of oil majors. Companies like Renaissance Africa Energy and Seplat Energy are investing heavily to boost production and infrastructure. However, challenges such as security threats, community conflicts, oil theft, and aging infrastructure persist, necessitating ongoing efforts to address these issues.
The Otakikpo terminal is not just a significant infrastructure project; it represents a shift towards greater self-reliance and efficiency in Nigeria’s oil industry. As local firms