Nigeria’s worst oil spill in a decade of over 40,000 barrels at its Bonga oil field is set to cost the beleaguered Nigerian economy further billions.
Bonga was discovered in 1993, first oil in 2004, and cost $3.6 billion constructed by Samsung 120km offshore in deepwater. Bonga’s target was to produce 225,000 barrels of oil and 150 million standard cubic feet of gas per day. It is operated by SNEPCo – 55% on behalf of the Nigeria National Petroleum Corporation (NNPC) under a Production Sharing Contract (PSC). SNEPCo has a Joint Operating Agreement (JOA) with Esso 20%; Nigerian Agip Exploration Limited (NAE) 12.5% and Elf Petroleum Nigeria Limited 12.5%.
Nigeria’s production has fallen at Bonga and a serious of other minor spills including at Shell’s $1.1 billion Nembe Creek Trunkline – mostly attributed to “vandalism” – is causing increased political tension and slimmer government coffers at a time of national angst at fuel subsidy withdrawal compounding the international economic slowdown.
At this time, the total costs are unclear, but there is strong evidence that it is directly impacting fisherman, and has doubled the price of fish at markets. Coupled with other economic turmoil in Nigeria, a tightening of environmental governance is vital to restore belief that the resource curse can be beaten.