Production down to 1.67m barrels as price rises above $50
The Federal Government’s anticipated revenue have further been constrained by the renewed attacks on oil facilities by Niger Delta militants.
In Southern Ijaw Local Government Area of Bayelsa State this week, there was an attack. A section of the Tebidaba-Brass pipeline along Azuzuama- Ikienghenbiri creek in Bayelsa State that belongs to Nigerian Agip Oil Company (NAOC), an arm of the Italian oil giant Eni, was blown up.
The NAOC on Tuesday declared force majeure on oil exports Brass crude, the second in a month. Force majeure is a legal concept that absolves companies from liabilities of contractual obligations due to factors outside its control. ENI said its production was cut by 4,200 barrels per day.
An attack in the area on May 18 resulted to a shutdown of some 1,000 barrels bringing a cumulative production loss to 5,200 barrels of the oil firm’s share of crude output
Shell and ExxonMobil had earlier halted production temporarily following leaks and vandalism of oil pipelines. Shell declared force majeure after continued attacks on its Nembe Creek Trunk Line (NCTL).
Shell stated that the force majeure was invoked following a leak at the Nembe creek, which may result into more unavoidable accidents. It added that repairs on the 90-kilometre trunk line were being carried out by AITEO Eastern Exploration and Production Company. It is ot known when the repair will be concluded.
ExxonMobil also declared temporarily force majeure on its Qua Iboe crude grade because of obstructions along a bridge leading to its Forcados terminal, which has been resolved.
Eni spokesperson confirmed the developments in a short e-mail. It said: “I can confirm the attack to the Ogbaimbiri – Tebidaba pipeline, with 4,200 barrels per day of production affected. I can confirm that force majeure has been placed on Brass oil exports from May 22, 2016.”
Nigeria’s oil production levels have been severely attacked by the activity of militants with the resurgence of militancy costing the nation as much as 800,000 barrels of crude oil per day.
The continual attacks prompted President Muhammadu Buhari to order enhanced security in the region. Nigeria relies on oil sales for 70 percent of government revenue but income has been hit by the global fall in oil prices since mid-2014 and increased militancy.
Buhari has begun programmes and policies that would in the next few years make Nigeria independent of oil revenues for survival. Vice President Yemi Osinbajo also said production is now at 1.67 million barrels per day (bpd) against a budgeted 2.2 million bpd, which was further confirmed by the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, during a special session with members of the House of Representatives.
The monthly allocation from the Federation Account for April shared on Wednesday among the tiers of government fell by N18.2 billion.
The Federal Government, states and local governments, shared N281.500 billion for April campared to N299.747 billion shared for March.