Reasons Nigeria still trails Angola in oil production
Nigeria continues to trail Angola as Africa’s highest crude producer despite the Federal Government’s engagement with Niger Delta militants which has reportedly been yielding positive results in halting attacks on oil facilities, Daily Trust reports.
Nigeria continues to lag behind its southern African counterpart as prolonged shutdown of key export terminals has continued to overshadow the negotiation gains.
The oil-rich NigerDelta was last year rocked by intermittent attacks by militant groups cutting Nigeria’s crude oil output to the lowest in almost 30 years. It also hit the government’s projected N820 billion oil revenue proposed in the budget for that year.
In the first half of 2016, supply disruptions significantly affected the country’s oil exports as four of the nation’s five largest export streams were totally suspended. Exports of Qua Iboe, Nigeria’s largest crude oil grade and exports usually amounting to more than 300,000 barrels per day were suspended. A force majeure was also declared on exports of Forcados, Bonny Light and Brass River.
Shell’s Nigerian unit declared force majeure on lifting from the Forcados export terminal since February 21, 2016 after militants blew up a pipeline feeding the terminal, knocking out at least 250,000 barrels of oil per day (bpd). The terminal has not been reopened.
Consequently, Nigeria had in March 2016 lost its spot as Africa’s highest crude producer to Angola when the country’s production dropped to 1.677 million barrels per day, compared to Angola’s 1.782 million bpd, according to OPEC in its oil market report. Nigeria’s target production was 2.2 million b/d.
The government started negotiations with NigerDelta leaders and militants which officials said have started yielding stability with expectations that output would rise to surpass the budgeted benchmark.
Minister of State for Petroleum Resources, Ibe Kachikwu, recently said peace moves initiated to end militant sabotage in the region was expected to bring normalcy and regain substantial portion of lost production.
However, subsisting force majeure at key terminals likewise shut down of some of them for maintenance have continued to slow production.
OPEC reported in its latest oil market report for April 2017 that Nigeria’s production slowed to 1.54 million barrels per day in March which is still below Angola’s 1.61 million barrels per day production within the same period.
Lamenting in its latest operations report, the Nigeria National Petroleum Corporation, (NNPC), said that the shutdown of the Trans Niger Pipeline, (TNP) and Nembe Creek Trunk Line, (NCTL), due to pipeline leakages, the shutdown of Agbami terminal for mini turn around maintenance and the subsisting force majeure at Forcados and Brass Terminals are issues that have eclipsed production.
The shutdown of these facilities NNPC said are the key inhibiting factors that have dragged and affected its overall performance and by extension revenues due to the federation.
With the proposed 2017 budget based on crude oil price of $42.5 per barrel and 2.2 million b/d oil production, there were several calls for a downward review of the benchmark due to these factors.
The country’s oil production problems was compounded by the fact that crude oil prices remained below $40 per barrel last year until early this year when prices started to rebound as a result of the oil production freeze deal reached between OPEC and non-OPEC member countries.
Kachikwu recently rekindled hopes of Nigeria bouncing back to the 2.2 million production target when he explained that repairs on some of these facilities was nearing completion.
The Group Managing Director of the NNPC, Dr Maikanti Baru, also said there were plans to ramp up crude oil production above the country’s budget benchmark of 2.2 million barrels b/d by the end of the second quarter of 2017 when critical export pipelines in the Niger-Delta are restored.
Shell Nigeria during the week announced that it had resumed production at 225,000 barrels per day at the Bonga field, a development that also looks set to boot Nigeria’s crude oil output.
The oil giant had on March 4, shut down the Bonga deepwater oilfield for turnaround maintenance completing it on April 8.
However, whether Nigeria would regain her number 1 spot in Africa is yet to be seen.
OPEC reported in its latest oil market report for April 2017 that Nigeria’s production slowed to 1.54 million barrels per day in March which is still below Angola’s 1.61 million barrels per day production within the same period