According to local reports, the Trinity Spirit exploded on Thursday morning at the Ukpokiti oil field off Nigeria’s coast near the Escravos terminal close to the River Niger delta.
Dramatic video shows the ship on fire with thick black smoke rising into the sky as it appears to be sinking.
The vessel is an FPSO, a floating production storage and offloading unit, which is reportedly owned by Shebah Exploration & Production Company Ltd (SEPCOL).
These types of ships are used by the offshore oil and gas industry for the production and processing and storage of oil and serve a similar function to larger oil rigs.
The ship had ten crew members on board, chief executive Ikemefuna Okafor said on Thursday, according to Reuters.
It is not believed the crew members have yet been accounted for.
Mr Okafor said investigations were underway to establish the cause of the explosion while attempts to contain the situation were being made with help from local communities and Chevron, which has a facility nearby.
“At this time there are no reported fatalities, but we can confirm that there were ten crew men on board the vessel prior to the incident and we are prioritising investigations with respect to their safety and security,” he said.
While it is not yet clear how much oil will be spilled by the Trinity Spirit, commentators have warned Nigeria could be facing its second environmental disaster in three months, after a huge oil spill from a disused, capped well head released 20,000 barrels of oil a day for a month into the waterways of Nembe, in Nigeria’s Bayelsa state.
The impact of that spill was described as being “like Hiroshima”, by the Nigerian government, with the leaking oil causing the death of marine life and damage to mangroves and waterways.