Nigeria’s oil production fell to 1.4 million b/d, as at May, 2016, nearly a 30-year low, the United States Energy Information Administration has said.
In a report released yesterday, the agency said the Niger Delta Avengers’ (NDA) attacks resulted in immediate and severe disruptions in crude oil production, as some of them targeted key oil-gathering and export infrastructure.
According to trade press reports, exports of multiple Nigerian crude oil grades, including Bonny Light, Forcados, Brass River and Qua Iboe, have been under periods of force majeure since the beginning of the year, meaning companies were released from export obligations as a result of circumstances beyond their control.
“Crude oil production disruptions in Nigeria reached 750,000 barrels per day (b/d) in May 2016, the highest level since at least January 2009. The increased disruptions come as militants continue to focus attacks on oil and natural gas infrastructure in the West African region.
“Nigeria is a member of the Organisation of Petroleum Exporting Countries (OPEC) and was Africa’s largest oil producer until Angola’s oil production surpassed it earlier this year,” the report said
Also, according to the minister of state for Petroleum Resources, Dr. Ibe Kachikwu, while speaking yesterday in Lagos, the country is currently in deficit of 1.1 million barrels per day of oil due to increased militant uprising in the Niger Delta region.
Kachikwu also said the declining price of oil in the international market has negatively impacted the country’s revenue leading to economic recession.
He spoke at the annual conference of the National Association of Energy Correspondents (NAEC) in Lagos yesterday, where he said the development was amply responsible for the current economic recession of the country.
Kachikwu said something concrete needed to be done now to arrest the ugly situation.
He lamented that vandals have caused havoc on oil facilities crippling local production while over supply of the product in the market was impeding prices and thus creating shock to the economy.
He said OPEC merely controlled 30 per cent of the market while 70 per cent was in the hands of major producers like, the US, Russia and Mexico who were non-OPEC members.
According to him, the industry was challenged by $6 billion Cash Call indebtedness accumulated over the last five years with the attendant inadequate financing of the industry during the period in review.
The minister of state revealed that increased militant activities in the Niger Delta had caused 60 per cent decline of gas production, adding that between 2010 and 2015, the industry recorded 3,000 incidents.
About 643 million litres of petroleum products amounting to N51,28 billion was lost in 2015. Between January and June, 1,600 incidents were recorded resulting in a loss of 109 million litres of petroleum products and 560,000 barrels of crude oil to refineries.
Besides, he said about 850 million standard cubic feet of gas production had been shut in due to the impact of crises and power outage exposure of 2,700 megawatts to 3,000 megawatts.
But Kachikwu said government was making effort to provide robust policies that would finalise and gazette a comprehensive gas policy, unlock gas potentials and ensure effective development of Nigerian gas market with adequate and sustainable gas supply to the power and industrial sectors.
At the meeting, the former managing director of the Nigerian Liquefied Natural Gas (NLNG), Mr. Babs Omotowa, said legislative insensitivity to sanctity of agreement was likely going to cost Nigeria loses about $25 billion gas investment.
Omotowa, who spoke yesterday in Lagos at the annual conference of the National Association of Energy Correspondents, also said Nigeria risked being imposed huge penalty for reneging on such agreement.
He said: “NLNG ability to attract future investments to maintain and grow the plant is being put in jeopardy by attempts to renege on promises that Nigeria gave to foreign investors that has enabled us attract $15 billion in foreign investment, and grown LNG capacity from a 2 Train complex to a 6 Train plant.
“Whilst we have received support from the executive on the need to keep the sanctity of the NLNG Act, the periodic attempts by the legislature to amend the clear promises made to investors will cost the country quite a lot.”
Source: http://allafrica.com/