Militancy resurgence plunges Nigeria’s oil output to 20-year low

Nigeria is suffering a worsening bout of oil disruption that has pushed production to the lowest in 20 years, as attacks against facilities increase in number and audacity. The attacks are costing the Nigerian government billions of dollars of lost oil revenue. Coincidentally, the fresh round of attacks comes after President Buhari vowed to stamp out corruption and oil theft.

President Buhari had warned that government will treat pipeline vandals like Boko Haram henceforth, adding that the activities of vandals and saboteurs blowing up oil and gas installations will get the same reaction from his government as that being taken against Boko Haram insurgents by the Armed Forces.

There are fears that this attack heralds a revival of Niger Delta militancy targeting oil facilities and installations. Niger Delta militancy largely halted after a 2009 amnesty deal, which essentially allowed militants to join in the oil corruption game for their own personal game, thereby putting an end to military and simply redirecting it into corruption. With a new government now in place, however, and a tough anti-corruption drive under way, militancy is again surfacing.

The latest attack was on Chevron’s Okan offshore platform which  feeds crude and  gas into the massive Escravos export facility. Chevron said it shut down its Okan offshore facility after it was “breached by unknown persons” and had sent “resources to respond to a resulting spill.” The facility, which feeds crude and gas into Escravos, one of the country’s largest export facilities, is jointly owned by the company and state-owned Nigeria National Petroleum Corporation (NNPC).

Chevron said it had shut down about 90,000 barrels a day of output following an attack on an offshore platform that serves as a gathering point for production from several fields. 

Before the strike on Chevron facility, Nigerian oil production had fallen below 1.7 million barrels a day for the first time since 1994. The Nigerian Agip Oil Company (NAOC) had shut crude oil production from its Brass River facility. Agip reportedly declared a force majeure on the Brass River grade of crude oil, after a fire was detected on the pipeline that lifts crude to the terminal. About 142,000 bpd of Brass River was due to be exported in May according to a loading programme.

In February, Shell declared force majeure after an attack on a pipeline feeding the Forcados terminal. The pipeline which has the capacity to export about 400,000 barrels per day (bpd) was scheduled to export some 249,000 barrels bpd in February and March, but the constraints to repair works on the vandalised pipeline have dashed the hope of further export through the lines in the last few months.

However, there were indications that the repair works on the pipeline feeding Forcados crude oil to the export terminal may last till June, according to Emmanuel Kachikwu, Nigeria’s Minister of state for Petroleum Resources.The International Energy Agency estimated that Nigeria could lose an estimated $1 billion in revenue by May, when it expects repairs on Forcados to be completed.

Angola now Africa’s number one oil producer

According to OPEC report, Nigeria produced 1.677 million bpd in March, down from 1.744 million barrels in February, while Angola oil output rose from 1.767 million bpd to 1.782 million in the same period. This is the second time in four months that Angola would overtake Nigeria’s crude oil production level.

Exports and production of Nigeria’s popular crude grade Forcados continued to be shut in due to a sabotage-related spill on the subsea Forcados pipeline.  The country has recently seen a rise in militant attacks in its main oil-producing region, the Niger Delta, denting oil production.

Angola saw its oil output rise to 1.782 million bpd last month from 1.767 million bpd in February, based on direct communication, according to the OPEC report.

The coming of Niger Delta Avengers

A group calling itself the Niger Delta Avengers said on its website that it was responsible for the attack. They are threatening to bomb more oil installations. The newly formed militant group, Niger Delta Avengers, has launched at least three attacks recently on Niger Delta oil installations, including a February attack on the Forcados export pipeline run by Shell.

The emergent militant group has listed some conditions that should be met by the Federal Government before peace can be returned in the Niger Delta, vowing to “crumble the economy” if its demands are not met.

Amongst other conditions, the group listed their demands to include: the immediate implementation of the report of the 2014 national conference, altering the ownership of oil blocks to reflect 60 per cent for the oil-producing people and 40 per cent for others. They also asked that the nation’s only maritime university located in ‘‘the most appropriate and befitting place Okerenkoko must start the 2015/2016 academic session immediately,’’ while the Minister of Transportation, Rotimi Amaechi should apologise to the Ijaw and the entire Niger Delta people for his ‘‘careless and reckless statement about the siting of the university.’’

Niger Delta militancy largely halted after a 2009 amnesty deal.

FRANK UZUEGBUNAM