NIGERIA’S current oil output
has fallen below 1.7 million
barrels per day, the lowest slump
in 22 years. The latest slump
may not be unconnected to
the renewed attacks on oil and
gas facilities in the Niger-Delta
region.
Following the latest bombings
of pipelines, tension has
increased in Nigeria as major oil
companies are at red alert over
the likelihood of disruption of
their operations. Besides, attack
on their operations has reduced
production forcing the return
of long queues at various fuel
dispensing stations.
Also, some oil firms have
been forced to cut production,
operate at very low level and
strengthen its security outfits
to protect its facilities and staff.
The implication is that attention
is focused more on securing
facilities than on the production
of crude and further limits the
production of refined products.
Some of these measures have
necessitated the evacuation of
some staff.
According to data compiled
by Bloomberg, output in Africa’s
biggest oil producer has fallen
below 1.7 million barrels per day
(bpd) for the first time since 1994.
At its peak, Nigeria’s oil output
stood averagely at 2.3 million
barrel per day.
However, following latest
attacks, production has been
drastically reduced as production
lines are disrupted by series
of bombings of pipelines and
other facilities. The renewed
attacks have led to palpable
tension in the region as many
are suspicious of a likely repeat
of violence and kidnappings
that have threatened not only the
security of the region, but had
serious economic implications
for the nation.
It also risks hitting crude
supplies at a time when Nigeria’s
oil-dependent economy is facing
a slump because of the fall in
global prices. As stated above,
fresh queues at petrol stations
around the country returned last
weekend, following speculation
that the government would
withdraw fuel subsidies that
keep prices low at the pump.
On May 5, a group known
as the Niger Delta Avengers,
NDA, blew up Chevron Valve
Platform in Abiteye, Warri North
Local Government Area of Delta
State. The Okan offshore facility
is operated by US oil major,
Chevron.
The company said last Saturday
that 35,000 bpd of crude was lost,
although some estimates have
put the loss higher.
Also, the new militant group
has forced Royal Dutch Shell to
evacuate most of its staff from its
production facility, Eja OML 79.
Sources said last weekend
that Shell evacuation was
carried out by three helicopters.
Friday Magazine gathered that
98 key personnel were airlifted
by helicopters from Eja OML 79,
run by Royal Dutch Nigerian
subsidiary, Shell Petroleum
Development Corporation, SPDC,
where production of 90,000 barrels
of oil per day has been halted.
Though a small group of staff
was left on the platform to carry out
skeletal operations, its production
suffered the same fate as Eja 79 in
the Bonga Field, which has a larger
production capacity and is operated
by another Shell subsidiary, Shell
Nigeria Exploration and Production
Company, SNEPCO.
Staff and facility are offered
protection by two gunboats
belonging to the Military Joint
Taskforce.
However, Shell’s Nigerian
subsidiary did not confirm the
operation, but said in a statement
that it is monitoring the security
situation and was “taking all
possible steps to ensure the safety
of staff and contractors”.
Dirk Steffen of the Denmarkbased
Risk Intelligence Consultancy
Firm, told AFP the evacuation was
a ‘precautionary’ step because of
threats from the NDA.
Steffen, the Head of Maritime
Security for the firm, said NDA
issued new threats on May 5 after
claiming responsibility for the
Chevron attacks.
“This time they specifically
named the facilities they would
be targeting. I assume this is
what prompted Shell to take
precautionary measures,” he wrote
in an email.
In February, Shell declared
‘force majeure’ after an attack on
a pipeline feeding the Forcados
terminal, which typically exports
about 200,000 barrels a day. It is
expected to resume in June.
The renewed attacks have
generated allegations and counter
allegations. For instance, former
militant leader, Government
Ekpemupolo, alias Tompolo,
dismissed the NDA, stating that
they are lackeys of some politicians
who are bent on dragging his name
into the mud. He waved aside the
three-day ultimatum the group
had issued to him to withdraw
his alleged denunciation of their
violent activities.
In the same vein, Ijaw Youth
Council, IYC, in a statement by
its spokesperson, Mr. Eric Omare,
sided with Tompolo, insisting that
the NDA should not drag him into
their destructive mission.
Its spokesman said in a statement,
“We do not see the justification in the
Niger Delta Avengers embarking on
destruction of oil facilities because
Tompolo denounced the group. I
think Tompolo did the proper thing
by coming out to inform the entire
world that he is not part of the
Niger Delta Avengers when there
were insinuations to the effect that
he was behind them.
“As with other cases of attack
on oil facilities, the Niger Delta
environment and the people are the
ultimate victim and would suffer
from these latest attacks. The IYC
believes that irrespective of the
grievances, there are better ways
of expressing them rather than
contributing to further destruction
of the already massively degraded
Niger Delta environment.”
Meanwhile, IPDI has warned
Niger Delta Avengers to stop the
bombing of oil facilities to avoid
further harm on the economy.
“Those threatening former agitator,
Tompolo, and the nation’s economy
should desist from that,” its
National President, Austin Ozobo,
said.
But Itsekiri leader, Chief Ayiri
Emami, has taken a swipe at
those behind the latest attacks by
claiming that NDA does not exist.
“The attacks are just to create a
platform for negotiation with
President Buhari.
“Some of us volunteered to
cooperate with security agencies
free of charge to fish out the
perpetrators of these bombings,
but the Delta State Government did
not see reason with us. They know
the person directing his boys to do
these things and should bring them
out.”
While the accusation and
counter accusations continued,
Consultants, BMI Research, said the
renewed unrest in the key region
was “a worrying development as it
demonstrates the increasing sphere
of assets that are under risk”.
“Shell’s much larger Bonga field
sits next door to the Eja facility and
often exports over 200,000 bpd,
highlighting greater production
risks than were previously
anticipated.”
BMI said production disruption
in the delta has historically been
onshore and was a major factor
driving Shell’s divestment of
onshore assets and switch in focus
to offshore blocks.
“The most recent attacks offshore
are a new safety concern for those
companies which once again find
themselves vulnerable to supply
disruptions,” it added.
The renewed violence comes
after Buhari-facing Islamist
militants, Boko Haram in the
northeast-began a crackdown on
endemic corruption in the sector
and rampant oil theft.
The government has also
said it would wind up an
amnesty programme, which
was introduced in 2009 and
saw thousands of rebels swap
violence for monthly training
and education stipends.
The upsurge in attacks since
January has also been linked to
multi-million-dollar corruption
charges brought against
Tompolo.
He is accused of defrauding
the government of $225 million.
The NDA is thought to contain
his supporters although he has
denied any links to the group.
Add that to the plan by
the federal government to
completely deregulate the
downstream sector of the
petroleum industry and the
picture seems bleak for the
masses who have suffered
untold hardship from scarcity of
petroleum products.
Sources disclosed on Monday
that the deregulation is likely
to kickoff next week unless, the
government changes its plans.
Complete deregulation of
the downstream sector entails
opening up the sector for
participation of all players,
especially the private sector
and is seen as the panacea for
the incessant fuel crises in the
country.
Deregulation will likely lead
to about N27.17 hike in pump
price nationwide and could see
petrol cost well above N100 per
litre. Currently, it sells at N86
and N86.50 at NNPC mega
stations and others owned by
independent marketers


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