• Friday, June 21, 2024
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Militants strike Chevron, put output recovery in doubt


Nigerian militants claimed an attack on oil pipelines less than two weeks after the government declared a cease-fire, while a worker strike further hampered efforts to restore production in the West African country.
Rebels late Wednesday blew up remote manifolds, or pipe systems, operated by Chevron Corp., according to a website claiming to represent the Niger Delta Avengers group. That followed an attack earlier this week on Chevron’s Well 10 and two crude-oil trunk lines.

The assaults cast doubt on claims by Emmanuel Kachikwu, Nigeria’s state minister for petroleum resources, that a cease-fire is allowing a return of output. Production that dropped to a 28-year low in May could be further stymied by a strike that began Thursday, with senior oil workers protesting job losses and delays to new energy legislation.

The activity of the militants “makes it increasingly unlikely that Nigerian oil production, which is currently being additionally curtailed by a strike, will regain its ‘normal level’ of a good 2 million barrels per day again in anything like the near future,” Commerzbank AG analysts said in a note to clients.

Nigeria was Africa’s biggest oil producer until rebels in the Niger River delta region started targeting oil infrastructure in February. The nation’s output fell to 1.37 million barrels a day in May, according to the International Energy Agency. That reduction, coupled with low oil prices, has caused severe economic problems.
While output recovered to 1.9 million barrels a day late last month, “I believe the recent attacks have taken us back below 1.5 million,” Dolapo Oni, a Lagos-based analyst at Ecobank Transnational Inc., said by e-mail.
The Bonny Light, Forcados and Brass River export terminals have all been subject to force majeure, a legal term allowing producers to walk away from contractual commitments after attacks. Royal Dutch Shell Plc said Thursday it lifted the force majeure on Bonny Light crude that was imposed in May as some production was restored into the terminal.

Shipments of the grade averaged about 160,000 barrels a day in June, compared with 230,000 in April, according to ship-loading data compiled by Bloomberg.

Just as some exports are brought back on stream, production is interrupted elsewhere. The strike by the Pengassan union, representing more than 2,000 oil and gas workers, started at midnight and will gradually bring operations to a halt, Emmanuel Ojugbana, a spokesman for the labor group, said by phone.
While the union is “trying to make some noise,” the stoppage is most likely to affect the domestic market where fuel shortages can be acute, according to Teneo Intelligence, which said the militants present the greater threat to exports.
“I don’t think these strikes will have a major impact,” Manji Cheto, an analyst at Teneo in London, said by phone. “The big risk to Nigeria’s crude exports remains vandalism and indeed that risk is a pronounced one.”

“Chevron is hit again,” the NDA said in their website posting, which could not be verified. “Our strike team blew up Chevron manifolds.”

Chevron doesn’t comment on the safety and security of its personnel and operations, said Isabel Ordonez, a spokeswoman for the San Ramon, California-based company.