Energy
Nigeria’s oil output drops to 700,000 bpd, loses N356.6bn
NIGERIA’S total oil output has declined by 700,000 barrel per day following persistent attacks on oil pipelines and facilities by the Niger Delta Avengers.
Also, the shutdown of Shell’s Forcados export line following attack on the facility by militants since February has cost the country about N356.6bn in revenue. In addition to Forcados, Qua Iboe and Brass River are also under force majeure, while Escravos and Bonny Light are facing significant loading delays.
It is still uncertain when the pipeline would come back on stream, although the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had said earlier this month that repairs would be completed by the end of July.
In February 21, Shell declared force majeure a legal clause that allows it to stop shipments without breaching contracts a week after militants blew up a pipeline feeding the Forcados export terminal, knocking out at least 250,000 barrels per day.
The International Energy Agency had in April estimated that Nigeria could lose an estimated $1bn (N197bn) in revenue by May, when repairs of the Forcados terminal was expected to be completed.
“The Forcados terminal in Delta State, one of Nigeria’s biggest terminals, was scheduled to load 250,000 barrels of crude per day. At $40 per barrel, Nigeria could stand to lose an estimated $1bn between February, when force majeure was declared, and May, when repairs are expected to be completed.” IEA report stated.
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At an average oil price of $40 and exchange rate of N197 to the dollar, the country lost at least N246.4bn as of June 19 and N110.2bn from June 20 to July 27 (using $290/$).
The Nigerian National Petroleum Corporation (NNPC) said recent upsurge in vandalism had negatively impacted on the Nigerian crude oil production output, losing its African top crude oil producer to Angola.
It said, “About 380,000barrels per day remained shut in due to vandalism of the 48-inch subsea export line on February 15, 2016.”
This month, Shell shut the Trans Niger pipeline, which is one of the pipelines that carry crude to the Bonny light export terminal, following a leak in Ogoniland.
While crude export was briefly reduced to 30-year low at the peak of the attack, Nigeria’s export has recovered sharply.
The militant group, Niger Delta Avengers, has claimed most of the strikes, which continued even during a one-month ceasefire announced by the government in late June. Other groups have also claimed attacks.
