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N’Delta Militants Strike Chevron Again as Nigeria Risks Losing Oil Market to Iran – Thisday

HomeNewsN’Delta Militants Strike Chevron Again as Nigeria Risks Losing Oil Market to Iran – Thisday
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09
Jun
N’Delta Militants Strike Chevron Again as Nigeria Risks Losing Oil Market to Iran – Thisday
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Ejiofor Alike in Lagos, Sylvester Idowu in Warri and Emmanuel Addeh in Yenagoa with agency report

Following the incessant production outages and force majeure declared on exports of some grades of Nigerian crude oil, which have created supply uncertainty to the major buyers of Nigeria’s crude oil, mostly foreign refineries, the refineries from India to the United States are backing away from buying Nigerian oil and turning to Iran and other Middle East countries for sustainable crude oil supply.

The uncertainty about deliveries of Nigerian crude to the foreign buyers due to supply disruptions has heightened in recent months as the country squares up to the new militant group in the Niger Delta, the Niger Delta Avengers (NDA), which wednesday claimed it had struck Chevron-operated RMP 20 Well at Didi community in Egbema, Warri North Local Government area of Delta State.

Force majeure is a legal clause that allows crude oil producers to stop exports and cancel deliveries to customers without breaching contracts by citing unforeseen circumstances.

Shell, ExxonMobil and Nigerian Agip Oil Company (NAOC) have invoked this clause in recent weeks to avoid contractual obligations to customers who were denied supplies.

The lack of guarantee of steady supply of Nigerian crude by the IOCs has fuelled the reluctance of foreign buyers to buy Nigerian crude.

It is feared that with this development, the country may risk losing some of its customers to other rival producers, particularly Iran.

So far, crude oil supply shortfalls like those experienced in Nigeria and Libya, have been met by rising output in the Middle East, especially Iran, which has ramped up output since the end of international sanctions against the country in January.

Nigeria, which ranked as Africa’s top producer, recently lost its position to Angola after the country’s production dropped from 2.2 million barrels per day to less than 1.5 million barrels per day following production disruptions caused by the recent upsurge in militant attacks on oil and gas facilities.
The NDA has staged a number of attacks on oil installations belonging to Shell, ENI and Chevron, pushing output in Nigeria down past 20-year lows last month.

Though some oil facilities have clawed back output, the Avenger’s attacks have continued and the group has vowed to bring Nigerian production to “zero”.

While Shell declared force majeure on its exports of Bonny Light and Forcados streams, Agip declared force majeure on exports of Brass River, ExxonMobil had also declared force majeure on exports of Qua Iboe due to rig accident, which damaged a pipeline.

Reuters reported that India’s HPCL was forced last month to cancel a vessel it chartered to carry 2 million barrels of West African crude due to the Qua Iboe force majeure.

India’s state-run Indian Oil Corp. Ltd – a major buyer of Nigerian grades over the past year – has stated in its recent tenders that it would not take grades under force majeure.

Indonesia’s Pertamina, another frequent buyer, also chose not to buy Nigerian grades in its recent tenders, favouring Congolese Coco, Angolan Girassol and Saharan Blend from Algeria instead.

Traders said Pertamina had shifted its preferences since the violence and uncertainty escalated, although Daniel Purba, Senior Vice-President of ISC Pertamina, told Reuters by text message that Pertamina is “monitoring” Nigeria, but “currently it’s still not affecting crude purchasing”.

ExxonMobil, which declared force majeure on Qua Iboe in May due to an accident, lifted the declaration last week, but the unpredictability is too much for some buyers.

The reduced demand means Nigeria is not benefiting as much as others from a rebound in Brent crude prices, which is partly driven by its own oil outages.

Even refineries on the US East Coast, which have been on a buying spree for Nigerian crude in recent months that averaged 240,000 barrels per day (bpd) in April and May, according to Reuters shipping data, are beginning to turn away.
As a result, differentials to dated Brent for Qua Iboe, Bonny Light and other grades are under downward pressure. There are several unsold cargoes for June loading, even with more than half a million barrels of production missing.

Militants Blast Chevron’s Well in Warri

Meanwhile, Chevron-operated RMP 20 Well at Didi community in Egbema, Warri North Local Government area of Delta State was the latest target of the Niger Delta militants’ attack yesterday as it was blasted, causing further disruptions to the nation’s oil production which had dipped from 2.2m bpd to 1.6m bpd in the last few weeks.

Although there was no official confirmation yesterday, the Niger Delta Avengers (NDA) in a series of tweets claimed responsibility for the blast.

The well, according to the tweets, is 20 metres away from Dibi Flow Station in Warri North Local Government Area of the state.

“At 1:00am today, the @NDAvengers blew up Well RMP 20 belonging to Chevron located 20 meters away from Dibi flow Stattion in Warri North LGA,” it said.

The blast obviously signifies the group’s rejection of the federal government’s olive branch by its setting up of a negotiation committee headed by the National Security Adviser (NSA) Babagana Munguno, as well as the standing down order to the military in the Niger Delta region yesterday.

“This is to the general public: We’re not negotiating with any committee. If the federal government is discussing with any group, they’re doing that on their own,” the group warned.

The last economic sabotage embarked upon by the group was last Friday’s destruction of Shell’s 48-inch Forcados underbelly export terminal pipeline located at Ogulagha and Odimodi communities in Burutu Local Government area of the state.

The Nigerian Navy Ship (NNS Delta) Warri had on Tuesday said it arrested a suspected top Commander of the NDA.
The suspect, whose name was not released, was alleged to be behind the recent series of attacks on oil and gas installations in the Niger Delta, particularly in Delta State.

THISDAY learnt the suspect was arrested last Thursday morning in a town, less than 20 minutes’ drive from Warri.
The suspect is, however, said to be non-Ijaw. Parading the prime suspect along with four members of his group, Commander, Nigerian Navy Ship (NNS Delta), Warri, Commodore Raimi Mohammed, told journalists that the suspect was behind the recent bombings of the Nigerian National Petroleum Corporation (NNPC) and Chevron pipelines.

New Group

Meanwhile, a new militant group, Ultimate Warriors of Niger Delta, has emerged demanding the award of 60 per cent of oil blocks to indigenous people of Niger Delta as one of the conditions to cease attacks on oil installations in the region.

The group, in a statement signed by its spokesman, Sibiri Taiowoh, yesterday also threatened to continue the attacks on oil facilities until the $16 billion Export Processing Zone (EPZ) project as well as the Federal Maritime University established by former President Goodluck Jonathan are completed and start operations.

It gave the federal government two weeks’ ultimatum to meet its demand or risk the shutdown of strategic oil and gas facilities in the area, including Chevron BOP, Okan Platform, MEREN Gas Gathering Compression Platform as well as blow up Chevron Tank Farm.

“We are also behind the recent pipeline bombing in the Niger Delta region and I can assure you we will not stop until the Export Processing Zone (EPZ) project and the Maritime University are totally completed and start operations,” it said.

The group said it would want to be engaged to protect oil pipelines in the region to enable it create jobs for Niger Delta youths.

There was, however, relief in the region following the failure of a new group, Niger Delta Liberation Force (NDLF), to launch the six missiles it had threatened to unleash on the country’s critical assets, including military hardware in the region.

The NDLF had threatened to fire missiles at the State House, Abuja and other strategic public assets in Lagos, Kaduna and Benue States.

Many respondents told THISDAY that though the group was little known, the threats could not be dismissed with a wave of the hand since several other groups like that had kept their vows in the past.

Aside threatening to bomb the Presidential Villa, the Department of State Services (DSS), Central Bank of Nigeria (CBN), the Police Headquarters and the Defence Headquarters, the group had also vowed to attack all the assets of the Joint Task Force in the region.

But THISDAY learnt that while there was no serious public security response to the vow to bomb the facilities, residents in the area took precautions, including staying indoors.

According to Christopher Abarowei, a resident of Yenagoa, “There was serious apprehension in the region concerning the threats. In fact, some teachers asked some students not to come to school wednesday.

“In my area, Harbour Road, Yenagoa, many children did not go to school. You needed to check the Free Readers Association, the people that read free news, saying that the equipment the boys possessed, Nigeria didn’t have them.
“But it was basically out of ignorance. Do you know what a missile is? Do you know what it takes to launch a missile?’’

He added: “Even among civil servants in the state, many believed that the militants had serious weapons. They also believed that the boys are invincible and nobody can stop them. It created palpable fear and tension in the region, especially in Yenagoa.’’

Nadi Mogbeyi, a resident of Oporoza, Gbaramatu, Warri South West, where wanted ex-militant, Government Ekpemupolo, also known as Tompolo, hails from, said that the community was obviously relieved that members of the group did not make good their threats.

He said that the coastal communities would have borne the brunt of the missile haul in the region if the JNDLF had fulfilled their pledge to attack.

“Many people were really afraid, though we also doubted the capacity of the group to carry out the level of attack they promised. But many people believed them and took precaution by asking their children to stay at home.
“Even when soldiers came this morning around 4am and left at about 7pm, and were carrying out their usual operation, people thought they came to stop the boys from setting off the said missiles,’’ he said.

Ex-militants praise FG

Ex-militants under the auspices of the Leadership, Peace and Cultural Development Initiative (LPCDI) yesterday applauded the federal government’s decision to withdraw troops from Niger Delta communities.
The National President of the LPCDI, Reuben Clifford Wilson, said in Yenagoa that directing the military to retreat from the coastal communities would further ease the tension in the area.

According to the ex-agitators, who once took up arms against the federal government over alleged ill-treatment of the region, asking the troops to end the siege on innocent citizens would help foster confidence in the process of peace-building in the Niger Delta.

While calling on the NDA to desist forthwith from acts of economic sabotage, the group expressed worry over the continuous drop in the federal allocations to the Niger Delta states.

“The effect of the military presence in our local communities as in the case of Oporoza should be avoided in the future while we have this opportunity for dialogue as the federal government has further shown its commitment by withdrawing the military from our communities,’’ the group said.

The group whose membership cuts across the nine states of the oil-producing areas, appealed to the NDA and other groups involved in the recent destruction of oil facilities to key into the peace process.
The ex-militants, who warned against the consequences of acts capable of drawing the wrath of the military authorities, also urged all aggrieved groups to embrace dialogue.

 


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