Nigerian Regulator Investigates Oil Production Vessel Explosion

(Bloomberg) --

Nigeria has started investigating an explosion on an oil production vessel capable of holding about 2 million barrels of crude.

“I've instructed our field operatives to move in and carry out a full-scale incident report,” Gbenga Komolafe, chief executive officer of the Nigerian Upstream Petroleum Regulatory Commission, said by phone. There will be no “speculation” from the agency while the probe is carried out, he said, without providing a timeframe for the work.

The Trinity Spirit blew up early Wednesday off the coast of Nigeria, marking yet another environmental setback for the nation's oil industry. It's not clear how much crude was being stored on the ship, nor who owned the oil. The vessel can process as much as 22,000 barrels of oil a day, according to the website of Shebah Exploration & Production Co., the independent Nigerian producer that was leasing the vessel.

The regulator will investigate the “source of the crude” onboard at the time of the explosion, Komolafe said. Data published by Nigeria's state-owned energy company show no production from Shebah's permit in 2020 or 2021, while the country's oil regulator announced in mid-2019 it was revoking the license.

Shebah is in receivership and had offered the vessel -- owned by a related company Allenne Ltd. -- to pay down some of its debt, according to a spokesman for the Asset Management Corp. of Nigeria. That process was yet to be concluded, the spokesman for the state debt recovery agency said.

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