The gateway to the oil-rich delta region in Nigeria could soon find itself under a renewed lockdown to battle rising COVID cases.
Nyesom Wike, Rivers State Governor, has threatened to impose a fresh lockdown on the state if residents fail to comply with the COVID-19 protocols.
If Rivers state goes into lockdown, this could potentially impact the ability of the oil companies operating in the delta region to move personnel to and from oilfields.
Strict restrictions could affect maintenance on facilities and pipelines, as they did in the spring of last year.
“Residents in Rivers could be “headed for a serious health disaster of profound consequences if residents and visitors continue to behave as if the pandemic no longer exists or is impotent in Rivers state,” Wike said in a statement seen by BusinessDay.
River state is a major producing state in the oil-rich Niger Delta region, the heart of Nigeria’s oil industry, producing most of the onshore crude oil that Africa’s top producer and exporter pumps.
“We may be constrained to re-impose the suspended COVID-19 lockdown measures across the state if the transmission of the disease continues to increase beyond tolerable limits,” Governor of Rivers state, home to the oil hub of Port Harcourt said.
Wike faulted those who abandoned their responsibility to comply with the measures. He decried that the situation has resulted in the rising spiral figures of both transmission and death cases.
Read also: Nigeria losing market share to peers as oil sector troubles crimp production
He warned the people of the oil-rich state that they were “headed for a serious health disaster of profound consequences if residents and visitors continue to behave as if the pandemic no longer exists or is impotent in Rivers state.
A lockdown in a key oil-producing state could impact Nigerian production, exports, and economy.
Apart from IOC, there are at least 50 small to mid-sized Nigerian producers pumping between 1,000 and 100,000 barrels each day whose operation has been hit by an unprecedented global pandemic which has also snarled the supply of spare parts and has prevented maintenance workers from doing their job.
Oil and gas companies involved in exploration and production spent an average of $80 billion a year on maintenance between 2015 and 2020, according to Rystad.
“When the virus and the quarantine measures have been eased and it is safe to get back to work, it doesn’t mean the same work can be done with the same intensity because the weather windows could be missed and that can push maintenance even to the next year,” Matthew Fitzsimmons, Vice President of the Oilfield Service team at research firm Rystad said.
Matthew Fitzsimmons, Vice President of the Oilfield Service team at research firm Rystad.
Over the past two weeks, COVID cases in Rivers State are soaring. The state is the third-worst hit area in Nigeria after Lagos and Abuja, according to Reuters.
Vaccination rates are low in Nigeria, and Rivers governor Wike appealed to residents and local community, and religious leaders to encourage more Nigerians to get a vaccine.
According to OPEC estimates, the oil and gas industry accounts for about 10 percent of Nigeria’s GDP, while petroleum exports revenue represents a massive 86 percent of total exports revenue.
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