EIA says Nigeria’s oil output will remain low through 2018 Q1

Nigeria’s oil production would remain down throughout the first quarter of 2018, if the restiveness in the Niger Delta region is not addressed, the United States Energy Information Administration (EIA) has warned.

The agency, in a report on its website, gave the warning, following the decision of the Organisation of Petroleum Exporting Countries(OPEC) to extend the oil cut exemption granted Libya and Nigeria from last month to next March.

It said renewed attacks on oil installation by militants would slow down the Federal Government’s efforts and major oil companies operating in the country to increase oil production.

It noted that restiveness in the region had resurfaced, weeks after the visit and meeting with the elders in the region by Acting President Yemi Osinbajo.

It said violence had returned to the region, despite the little peace achieved by the visit of Osinbajo.

‘’’Inability of the Federal Government to sustain the peace in the region, means that there would be a continued disruption of production activities in the area. This would further impact negatively on the crude oil output. The two separate exemptions enjoyed by Nigeria – the six months and the nine months extension recently approved by OPEC at its meeting in Vienna, Switzerland, is a good development for Nigeria, if the country can do everything within its power to end insurgency in the area,” EIA said.

It said the price of crude oil at the international market had increased to $56 per barrel, before it dropped to $52. It urged the Federal Government to push for increased output to benefit from further increase in crude oil price.

The Nigerian National Petroleum Corporation (NNPC) has indicated a steady decline in output since January. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has decried the development.

Nigeria’s crude oil production in five months went up until May last year, when it dropped to 295.09 million barrels, showing a shortfall of 36.15 million barrels, or 10.91 per cent from 331.24 million barrels recorded in the preceding five months of August-December 2015.

The January-May, last year output translated to an average daily crude oil output of 1.97 million barrels per day (mbpd), according to the data released by the Nigerian National Petroleum Corporation, NNPC.

The output level reflected the impact of production shut-ins following increased militancy siege on oil installations.

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