Concerns mount over continued attacks on oil facilities

Militants in the Niger Delta blew up the Chevron Valve Platform located on the high sea near Escravos in Warri, Delta State in a renewed attack on oil installations in the country.

There were indications that the nation may not heave a sigh of relief soon from the renewed militancy in the oil-rich Niger Delta, which has brought crude output to the lowest in the past 20 years.

A new report from PGI Intelligence stated that the spate of sabotage may spill into 2017, if the Federal Government does not take urgent measures to curtail the menace.

“Nigerian oil output will be affected by major outages for at least the next 12 months after a wave of pipeline attacks”, it stated.

The document highlighted that a new generation of militants in the Niger Delta, The Niger Delta Avengers, could create long-term implications for Nigeria’s oil and gas industry. It also noted that pipeline attacks are likely to continue for the short to medium term.

After several attacks on oil pipelines belonging to the Nigerian National Petroleum Corporation (NNPC), Shell, ExxonMobil, Chevron and Agip, Nigeria’s crude oil and condensate production has fallen almost 50 per cent from the start of the year to around 1.1 million barrels per day.
An NNPC official disclosed this after an attack on NNPC gas and crude trunkline close to Warri at the weekend.

Currently, four Nigerian crude export grades: Qua Iboe, Bonny Light, Brass River and Forcados are under force majeure as a direct result of the militant attacks.

Besides, the NNPC source noted that the nation has lost over 1 million bpd to the attacks within two months, as the nation was producing about 2.2 million bpd at the beginning of the year.

In view of the recent development, the Organisation of Petroleum Exporting Countries (OPEC) has revealed that Angolan oil production increased again in April, overtaking Nigeria as the highest producer in Africa.
According to the report, Angola’s daily output increased to 1.788 million bpd, while Nigerian production dropped to 1.637 million bpd in April and further slide to 1.1 million bpd in May.

According to the May report, Africa’s oil supply decreased by10,000 bpd to average 2.37 million bpd in 2015 and is expected to see a further contraction of 30,000 bpd in 2016, to average 2.34 million bpd.

Declines are said to be expected from Egypt, Equatorial Guinea, Gabon and the Sudans, while production in the Congo and some other African countries is expected to grow, though oil production in Chad and South Africa will be unchanged in the current year.

Meanwhile, the Federal Government and stakeholders from the Niger Delta region have resolved to work together to stop the recent upsurge in attacks on critical oil and gas installations and ensure security, stability and economic development of the area.

The Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Ibe Kachikwu, said all the stakeholders resolved that solutions to the incessant attacks on oil and gas pipelines are within the communities, stressing that communities were now saddled with the responsibility of ensuring protection of pipelines within their domain.