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Nigeria’s oil output, N7.44trn budget face new threat

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By Udeme Akpan

There are strong indications that Nigeria’s oil output, and by extension the nation’s N7.44 trillion 2017 may be facing new threat as attacks on oil facilities gradually return to the Niger Delta.

Federal Government’s intervention through the office of Vice President, Prof Yemi Osinbajo, and repairs of damaged facilities, had assisted to raise oil output from below 1.8 million barrels per day, bpd, to 2.2 million bpd, including condensates.

President Muhammadu Buhari presenting the 2017 Budget before a joint session of the National Assembly on Wednesday, December 14, 2016.

But Vanguard’s investigations, weekend, showed that the oil and gas industry has recorded many new attacks in recent times, thus threatening the capacity of the nation to meet the nation’s 2.2 million bpd target.

Specifically, investigations in Akwa Ibom, Cross River, Imo, Abia, Bayelsa, Rivers, Delta, Edo and Ondo states showed that many International Oil Companies, IOCs, and their indigenous counterparts have started witnessing increased disruptions in their operations.

For instance, Shell Petroleum Development Company, SPDC, the oldest and biggest producer and operator of a joint venture (SPDC JV) between the government-owned Nigerian National Petroleum Corporation, NNPC (55 per cent share), SPDC (30 per cent), Total E&P Nigeria Ltd (10 per cent) and the ENI subsidiary, Agip Oil Company Limited (five per cent), recorded 49 attacks between January and early September (nine months) this year.

In its latest report obtained by Vanguard, Shell, which SPDC JV’s assets include around 50 producing oil fields, a network of approximately 5,000 kilometres of oil and gas pipelines and flow lines, five gas plants and two major oil export terminals (Bonny and Forcados), attributed most of the attacks to sabotage.

Specifically, a breakdown showed that six cases were recorded in January, another six in February and 11 in March, making it 23 cases in the first quarter of 2017.

The report stated that 11 cases, seven and nine were recorded in April, May and June, respectively, this year, totalling 27 cases in the second quarter of this year, adding that nine, four and one were recorded in July, August and early September respectively, which come to 14 cases in the third quarter of the year.

In terms of volumes, while some of the cases culminated in the loss of commercial oil, others were relatively small in quantity.

Other oil firms

Investigations showed that other companies, including ExxonMobil, Total E&P Nigeria Limited, Chevron Nigeria Limited, Nigerian Agip Oil Company and Addax Petroleum Development Company also have different ongoing issues with communities, capable of escalating into large scale conflicts and disruption of operations, if not well-managed.

But one challenge that affects all of them was the recent call by oil bearing communities and states, especially Akwa Ibom where ExxonMobil, Shell, Total and others operate offshore to relocate to the state.


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