This initiative is a collaborative undertaking involving Nigeria’s national oil company, NNPC Ltd., which holds a 55% stake in OML 18, along with Sahara Group, Eroton Exploration & Production, and Bilton Energy. The project centers on a Very Large Crude Carrier that has been converted into a double-hull Floating Storage and Offloading (FSO) vessel. This FSO is designed to streamline crude oil operations by directly receiving, storing, and offloading crude to export tankers, thereby circumventing the limitations associated with existing pipeline and barge infrastructure.

Why this matters: Challenges in Nigeria’s crude evacuation

Nigeria’s upstream sector has historically faced significant challenges in crude oil evacuation due to pervasive logistical and security issues. Pipelines, often traversing difficult terrain, communities, and remote areas, have been constant targets for theft and sabotage. This has led to the country losing tens of thousands of barrels of oil daily to illicit tapping and vandalism. While recent initiatives have improved pipeline availability, with NNPC reporting near 100% pipeline and terminal receipts, a substantial increase from peak losses exceeding 100,000 b/d, the inherent structural vulnerabilities in the system persist.

Traditional evacuation methods, such as barges and ship-to-ship transfers, are often slow and limited in capacity. These methods are prone to delays caused by siltation in berthing slots and congestion at terminals. To address these challenges, the Cawthorne FSO will serve as an offshore buffer and transfer hub, aiming to alleviate these bottlenecks.

Operational and strategic impacts

The FSO’s location near the Bonny export point enhances crude loading reliability for producers, lessening their reliance on extensive and vulnerable onshore pipelines. With a substantial 2.2 million barrel capacity, the vessel provides a crucial strategic buffer, allowing production to continue even if pipelines are shut down until export vessels arrive. The FSO boasts a double-hull configuration, advanced mooring systems, and integrated digital controls, all designed to bolster safety and mitigate the risk of spills or leaks. Tosin Etomi, Sahara’s commercial lead, highlighted that this design is also expected to reduce carbon emissions associated with barge movements and improve evacuation safety.

Strategically, the FSO enhances national authority over a vital component of the oil value chain. This lessens dependence on foreign-owned terminals or external storage facilities, thereby retaining more value and risk within Nigeria.

This initiative aligns with a wider regulatory push, as exemplified by Nigeria’s recent implementation of rules for real-time cargo tracking, vessel clearances, and unique identifiers for export shipments. These measures are designed to combat theft and under-declaration at export points. Consequently, the commissioning of Cawthorne complements this systemic drive towards greater transparency and control over crude oil movements.

Risks, comparisons and what to watch

Projects of this magnitude inherently carry risks. Maintaining the FSO’s operational status and uptime is paramount, as any downtime or stranding would negate its benefits. The security of the mooring site is also a critical concern, given the vulnerability of offshore infrastructure to sabotage or interference. Furthermore, regulatory and environmental compliance will be closely monitored, consistent with all oil-handling facilities.

Other oil-producing countries have successfully implemented Floating Storage and Offloading (FSO) or Floating Production, Storage, and Offloading (FPSO) units for remote or conflict-affected fields. For example, many offshore West African fields utilise FPSOs to avoid the vulnerabilities of longshore pipelines. For Nigeria, converting an existing vessel into an FSO offers a more cost-effective short-term solution compared to constructing a new fixed terminal. 

In the coming months, several key factors will be important to monitor:

• The ability of OML 18 to consistently increase its production towards its 2025 goal of 50,000 barrels per day.
• Whether export volumes through Bonny demonstrate the anticipated increases.
• A measurable reduction in reported losses due to theft and spillages.

The outcome of Cawthorne could significantly impact future investment in Nigeria’s coastal infrastructure.

The commissioning of FSO Cawthorne is a pivotal development for Nigeria’s oil sector. It provides a strategic, high-capacity buffer to safeguard output from disruptions, aiding the country in achieving its ambitious production and export targets. Despite recent improvements in pipeline security, underlying vulnerabilities persist, and logistical bottlenecks continue to hinder the sector’s full potential.

If Cawthorne fulfills its potential, promising improved reliability, reduced theft and downtime, and quicker export cycles, it will represent more than just a symbolic achievement. It will act as a practical catalyst for increased revenue, energy independence, and operational consistency. While it is yet to be determined if this will serve as a model for further locally-owned infrastructure along Nigeria’s oil coast, the nation has undeniably made significant progress.

Written By: 

*Dr Iqbal Survé

Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN

*Sesona Mdlokovana

Associate at BRICS+ Consulting Group 

African Specialist

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