Rystad on Nigerian FPSO Explosion: 'No Impact on Oil Price. Environmental Implications Still Hard to Quantify'
The Trinity Spirit FPSO, operated by Nigeria's SEPCOL, exploded Wednesday and started burning, and, according to videos shared on social media, sinking. However, according to Rystad Energy, the incident is not expected to have an impact on Nigerian production as the unit was not producing at the time of the explosion. Environmental implications, however, are yet to be quantified.
According to a Reuters report on Wednesday, an industry source active in Nigeria's oil sector said the FPSO had about 50,000 barrels in storage but was not pumping crude from the Ukpokiti oilfield in the OML 108 block when it exploded.
Zhenying Wu, senior analyst with Rystad Energy, a Norway-based energy industry intelligence firm, said in a note on Thursday: "The Trinity Spirit explosion is not expected to alter Nigerian oil production and will therefore not have an impact on oil prices in the short term, as the unit was not producing at the time of the explosion.
"The primary concern is the potential environmental implications of the situation, which will be hard to quantify until after the dust settles and the aftermath is assessed."
Wu said: "The Trinity Spirit floating production, storage and offloading (FPSO) vessel was positioned in the Ukpokiti field off the coast of Nigeria, where it has operated since 1997.
The vessel is capable of producing liquids at the rate of 22,000 barrels per day (bpd), it is likely that the unit has not been producing oil since 2019, and has been used solely for storage purposes.
The maximum liquid production rate for this vessel – 22,000 bpd – represents less than 2% of the total Nigerian crude oil production based on 2021 levels of 1.3 million bpd.
The Trinity Spirit was capable of storing up to 2 million barrels of crude oil, but it is unlikely that it was operating at full capacity or had full storage at the time of the incident.
According to The impact of the Trinity Spirit leak in terms of leakage is likely to be considerably lower than the most recent large offshore oil spill, the Deepwater Horizon crisis which leaked around 4.9 million barrels into the Gulf of Mexico in 2010.
The hull of the Trinity Spirit was originally built in 1976 and the latest upgrade took place in 1997, highlighting the age of the vessel.
The Trinity Spirit was at the end of its lifespan, which is a cause for concern for other similar vessels and operations in Nigerian waters as they operate in a region with minimal regulations."
Reuters said Thursday there had been 10 people aboard at the time of the explosion, but no fatalities were reported at the time. According to the Guardian.ng report on Friday, three persons were feared dead, while seven other workers were missing.
