ADVERTISEMENT

Nigerian oil output falls towards 22-year low as violence spreads

While Shell said the latest unrest had not yet impacted production, its Forcados field is still closed and under force majeure following a February subsea pipeline attack, taking out 250,000 bpd.

Oil workers walk through pipe installations on a tanker at Bonga off-shore oil field outside Lagos, file.

A series of attacks on Nigeria's oil infrastructure has pushed its output of crude close to a 22-year low, Reuters data shows, putting intense pressure on the country's finances.

Shell workers at Nigeria's Bonga oilfield in the southern Niger Delta were evacuated following a militant threat, a senior labour union official said on Monday, while attacks late last week forced Chevron to shut its Okan offshore facility, taking out 35,000 barrels per day (bpd).

The violence has depressed production in what is typically Africa's largest producer to roughly 1.69 million bpd in May, the lowest since at least June 2007, when production fell to 1.68 million bpd, International Energy Agency data shows.

A small reduction from any field would quickly send output to the next low, seen in August 1994, when it hit 1.46 million bpd, according to the IEA data.

ADVERTISEMENT

"It's really not a good situation," said Eugene Lindell, senior energy analyst with JBC Energy in Vienna, noting that the global excess of crude was keeping Brent prices from moving significantly higher on the back of the outages. "They have less production, and they're getting less bang for their buck."

The country's 2016 budget, signed into law just last week, assumes 2.2 million bpd of oil production at $38 a barrel. In a country analysis released late last week, the U.S. Energy Information Administration noted that pipeline sabotage and oil supply disruptions had increased in 2016, putting direct pressure on the country's finances.

"Because Nigeria heavily depends on oil revenue, its economy is noticeably affected by changes to its oil production and/or to global crude oil prices," the report said.

President Muhammadu Buhari has said there would be a crackdown on "vandals and saboteurs" in the country's oil-producing Delta region, analysts said the violence could scare investment away from the country.

"If it continues like this ... there are companies who will probably not consider Nigeria" for upstream investments, Lindell said.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Anambra PASAN begins strike over Soludo's failure to grant financial autonomy

Anambra PASAN begins strike over Soludo's failure to grant financial autonomy

Governor Sanwo-Olu pays ₦4.48 billion to 1,455 retirees in accrued pensions

Governor Sanwo-Olu pays ₦4.48 billion to 1,455 retirees in accrued pensions

Court discharges ex-AGF Adoke, 6 others in Malabu oil scam case

Court discharges ex-AGF Adoke, 6 others in Malabu oil scam case

Nigerians are expected to pay for TV licences — here’s what the law says

Nigerians are expected to pay for TV licences — here’s what the law says

BEDC management denies rumours of dissolution, increases revenue

BEDC management denies rumours of dissolution, increases revenue

Federal Govt set to sue Binance ltd, officials for tax evasion on April 4

Federal Govt set to sue Binance ltd, officials for tax evasion on April 4

What Nigerian law says about treatment of people with disabilities

What Nigerian law says about treatment of people with disabilities

Gambling investment is evil, will take away everything - Cleric warns youths

Gambling investment is evil, will take away everything - Cleric warns youths

All teachers need to learn digital skills to earn their students’ respect

All teachers need to learn digital skills to earn their students’ respect

Pulse Sports

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

Michelle Alozie: I had to do it because of African referees

Michelle Alozie: I had to do it because of African referees

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

ADVERTISEMENT
ADVERTISEMENT