Nigeria is losing over N5.4 billion per day due to loss of over 600,000 barrels per day of crude oil production due to militant attacks on oil and gas infrastructures.
Attacks on oil and gas infrastructures this year have seen disruptions on Agip facility at Orukari, Golubokiri and Kpongbokri communities of Brass Local govnrment in Bayelsa with a 142,000 barrels per day.
In February, Shell Petroleum Development Company of Nigeria Ltd declared force majeure on liftings from the Forcados export terminal, following disruption in production caused by the spill on its subsea crude export pipeline and translated to a loss of 300,000 barrels per day.
Last week, militants blew up Well D25 in Abiteye, a major gas well belonging to Chevron. Major pipelines around the area were affected including the Abiteye, Alero, Dibi, Otunana and Makaraba flow stations that feed the Chevron tank farm.
This week, Shell Petroleum Development Company of Nigeria Ltd declared force majeure on exports of Bonny Light as a result of a leak that led to the closure of Nembe Creek Trunk line for repairs by the operator, Aiteo Eastern E&P Company Ltd.
Nembe Creek Trunk line is a 97 kilometre, 150,000 barrels of oil per day pipeline constructed by Royal Dutch Shell. The Trunk Line is one of Nigeria’s major oil transportation arteries that evacuates crude from the Niger Delta to the Atlantic coast for export.
Last week, “Okan offshore facility in the Western Niger Delta region was breached by unknown persons. The facility is currently shut-in and we are assessing the situation and have deployed resources to respond to a resulting spill,” said a statement from Chevron.
Analysts are worried for the economy of the country, following these declarations of force majeure and say it will have dire implications for the country.
Reacting to the development Sola Omole, director, communitcation for Aiteo Exploration and Production Co and the operator of the pipelinesaid:“‘We don’t know if it’s an attack or sabotage” on the Nembe Creek line, He said it is only when the contractor gets to the site and takes a look at it that we can say definitively that this is the cause of the problem.
“Apart from the immediate cost of the assets and the production losses to operators, it has the capacity to lower the overall investment attractiveness of the country. Something Nigeria doesn’t need at this point,” said Chijioke Mama, energy research analyst
He adds: “It’s actually counterproductive for the perpetrators; because insecurity itself is a major deterrent to all development efforts; whether from the state or from the Federal Governments. Nevertheless government should swiftly address the causes before the ripple of violence becomes wider; because they will ultimately have cross-sectorial effects.”
Meanwhile the International Energy Association had in its April oil market report forecasted that Nigeria will lose $1billion in revenue to the month of May.
The spate of recent attacks by a group known as the Niger Delta Avengers is threatening to cripple the Nigeria’s economy. Already four power plants have been shut and loss of revenue may affect the 2016 budget as well as increase the deplorable Niger Delta environment.
“The environmental cost of vandalism is more on the affected communities or regions and it ultimately hurts the communities and limits economic growth. If it continues or expands; Nigeria’s already dwindling revenues will be stifled the more,” said Mama.
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