Militants cut 300,000bpd from Nigeria’s crude production

Two attacks on Forcados terminal in a space of 14 days have cut off about 300,000 barrels per day from Nigeria’s crude oil production.

This is casting doubts over Ibe Kachikwu, minister of state for petroleum resources’ claim that Nigeria had ramped up production to 2.1 million barrels per day.

While addressing the press shortly after a meeting between President Muhammadu Buhari and representatives from the oil-producing Niger Delta region last week, Kachikwu said Nigeria’s oil production was nearly back to normal following outages due to militant attacks.

“The reality is that as of today and this morning, we are at 2.1 million barrels production. That’s substantial,” Kachikwu said in the nation’s capital, Abuja.

Only yesterday, a blast rocked a pipeline operated by the Nigerian National Petroleum Corporation (NNPC) that feeds the Forcados terminal in the Southern Niger Delta energy hub. Garba Deen Mohammed, NNPC’s spokesman, confirmed this to BusinessDay by phone.

“It is confirmed,” he said in response to BusinessDay’s enquiry, but he declined to comment on Nigeria’s current crude production volume.

On November 2, Niger Delta militants bombed the same pipeline only two days after it came back on stream following eight months outage.

Forcados crude has been under force majeure declared by the operator Shell, since an attack by the Niger Delta Avengers on the sub-sea pipeline in February crippled about the capacity of the export terminal.

These attacks on the pipeline cast doubts that Nigeria is meeting production volumes of 2.1 million barrels per day as announced by Kachikwu. Renewed attacks are also questioning Nigeria’s ability to meet production volume agreed in the supply cap deal with Organisation of Petroleum Exporting Countries (OPEC).

“It seems these attacks are timed to occur after every announcement of production recovery, it means information about this production must be treated as sensitive,” a top source in the energy sector said.

Peace talks had raised hopes that with 300,000 barrels per day capacity coming back on stream, Federal allocations for December will rise by N180billion and power supply will increase by 2,000megawatts.

Analysts have expressed worry over the tenuous of the ceasefire agreement militants reached with the Federal Government and further attacks only inspire less confidence.

“This shows that little or no progress has been made,” said Luke Doogan, energy analyst at West Sands Advisory Limited.