• Monday, March 04, 2024
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Nigeria’s oil output dips to 998k daily, lowest in 7 months on export terminal outage

Nigeria’s oil output dips to 998k daily, lowest in 7 months on export terminal outage

Nigeria’s crude oil production fell to 998,602 barrels per day (bpd) in April this year, the lowest in seven months, according to the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) data, a development analysts blame on outages of critical export terminal.

Data from the upstream regulatory body shows that the country’s oil production decreased by 23 percent from 1.3 million bpd in February this year. On a year-on-year basis, it dipped by 18 percent from 1.21 million bpd.

The last time Nigeria witnessed a decline below 1 million barrels per day was in August (972,394 bpd) and September (937,766 bpd), when the country was battling oil thieves.

Oil and gas analysts have pinned the recent decline on the shutdown of activities at the Forcados oil terminal, one of Nigeria’s major export terminals.

Uwaye Omijie, a petroleum production engineer at Midwestern Oil and Gas Company, Delta State, told BusinessDay that the Forcados oil terminal, which has about six Oil Mining Lease (OML) exporting via the terminal, has been down for over two weeks.

“Because the Forcados oil terminal is down, facilities have shut down production, leading to the drop in Nigeria’s April production output which is usually compiled in May,” he said. If the oil terminal does not come up within the next week, Nigeria will record a lower record in May, when it’s reported in June.”

Stanley Akhile, operations team Lead at Midwestern Oil and Gas Company Limited, told our correspondents that the dip in oil production is due to the current sectional replacement on the Forcados line. Also, strike action at the Nigerian unit of ExxonMobil has cut off production.

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“Because of the sectional replacement at the oil terminal, virtually all the injectors in the Forcados line are down. That is why they have been a drop in production,” he said.

“Injectors are not pumping into the Forcados line. Some have shut down their flow station because their tanks are filed up because of the sectional replacement on the Forcados line.”

Sectional replacements at oil terminals refer to replacing a pipeline or storage tank section that has become damaged or worn out. It involves cutting out the damaged section of the pipeline or tank and installing a new section in its place

“The Forcados line has not been replaced since it was commissioned. It has punctures due to vandals. Some sections of the Forcados line are already worn-out. Irrespective of the maintenance carried out on the terminal, it will not sustain. They will be leakages on those points,” Akhile said.

Meanwhile, the Organization of the Petroleum Exporting Countries’ oil production declined by 310,000 barrels a day to an average of 28.8 million, the lowest level in almost a year due to a fall in Iraq’s exports and pipeline suspension while a labour strike cut shipments from Nigeria, according to a statement by Bloomberg.

OPEC and its allies have announced new production cutbacks starting this month to shore up global oil markets, but the biggest supply changes in April were unintentional. Iraq accounted for about 80 percent of the drop.

A political spat between the central government in Baghdad and the semi-autonomous Kurdistan region has led to the halt of a pipeline that normally carries 500,000 barrels a day to international markets via Turkey.

In Nigeria, a production recovery seen in the run-up to presidential elections has fizzled, with industrial action forcing Exxon Mobil Corp. to renege on shipments from several terminals last month.

Iraq’s output slumped by 250,000 barrels per day to 4.13 million, the lowest since late 2021 after Turkey suspended the northern pipeline following an international business tribunal ruling. While Baghdad and Kurdish authorities have struck a temporary deal to regain oil, “technical matters” are delaying the restart.

Nigeria retreated by 120,000 barrels a day to 1.32 million, reversing a surge seen earlier this year when the country reached an accord with a former warlord in the oil-rich Niger Delta region, the Bloomberg statement said.

Workers at ExxonMobil facilities in the country returned to work two weeks ago, allowing production and exports to resume after a two-week industrial action.