Nigeria’s oil production crashes below 1.5 m barrels per day

By The Nation Newspaper

Daily oil production from Nigeria yesterday crashed below 1.5 million barrels, representing a loss of over 1 million barrels as ExxonMobil on Wednesday became the fourth oil major in a month to warn customers over delays to Nigerian oil and gas exports.

Nigeria, which produces about 2.4 million barrels daily, depends largely on proceeds from oil to service over 85 per cent of its annual budget and this loss of over 1 million barrels poses a fresh threat to the country’s budget.

Already, Exxon’s Nigerian unit, Mobil Producing Nigeria, operator of the Nigerian National Petroleum Corporation, (NNPC)/MPN Joint Venture declared on Wednesday it would not be able to meet its contractual agreement with its traders as it declared a force majeure on Qua Iboe crude oil exports.

A statement by its General Manager, Public and Government Affairs, Paul Arinze, said the action was due to outages caused by a pipeline oil spill on November 9, which witnesses said had spread 20 miles down the coastline.

Royal Dutch Shell lifted on Wednesday its force majeure on Nigeria’s benchmark Bonny Light crude oil exports, easing some of the supply concerns.

But three of Nigeria main oil grades; Qua Iboe, Brass River and Forcados are still under force majeure. These oil streams together account for around 700,000 barrels per day (bpd) or around a third of total Nigerian exports.

France’s Total and Italian oil firm Eni have also declared force majeure, on gas and oil supplies, respectively.

These developments have added to a raft of problems caused by oil spills, theft and flooding.

A huge fire on an oil tanker being used to steal oil last month prompted Shell’s outages. The Anglo-Dutch, major shut another pipeline in Imo River on October 31 due to theft damage and deferred 25,000 bpd.

Oil theft is a major problem in the winding creeks and waterways of the Niger Delta, where it is easy to conceal boats and illegal refineries in the dense mangroves. Nigeria estimates around 150,000 bpd is stolen, much of which is sold abroad.