- Strike on Chevron platform cuts output by about 90,000 b/d
- Crude output fell in April to lowest in more than two decades
Nigeria
is suffering a worsening bout of oil disruption that has pushed
production to the lowest in 20 years, as attacks against facilities in
the energy-rich but impoverished nation increase in number and audacity.
Chevron
Corp. shut down about 90,000 barrels a day of output following an
attack on a joint-venture offshore platform that serves as a gathering
point for production from several fields. Even before that strike on
Wednesday night, Nigerian oil production had fallen below 1.7 million
barrels a day for the first time since 1994, according to data compiled
by Bloomberg.
“This
is some very, very sophisticated brazen attack,” said Dolapo Oni, the
Lagos-based head of energy research at Ecobank Transnational Inc. “It is
a resurgence of militancy. These guys don’t seem to be after money.
They just want to frustrate the government.”
The
fresh round of attacks come after President Muhammadu Buhari vowed to
stamp out corruption and oil theft. They echo a campaign waged by the
self-proclaimed Movement for the Emancipation of the Niger Delta between
2006 and 2009, which cost the Nigerian government billions of dollars
of lost oil revenue. That violence abated after thousands of fighters
accepted an amnesty from late-President Umaru Musa Yar’Adua and
disarmed, in exchange for monthly payments from the government in some
cases.
Facility Breached
Chevron said it shut down its
Okan offshore facility after it was “breached by unknown persons” and
had sent “resources to respond to a resulting spill.” The U.S company on
Friday said that 35,000 barrels a day of its own net production was
affected. Okan, which feeds crude and gas into Escravos, one of the
country’s largest export facilities, is jointly owned by Chevron, with a
40 percent stake, and state-owned Nigeria National Petroleum Corp.,
which has the rest, according to NNPC’s website.
A group calling
itself the Niger Delta Avengers said on its website that it was
responsible for the attack. The authenticity of the claim could not be
verified by Bloomberg News.
The Nigerian government is struggling
to contain the economic damage of the slump in energy prices and
separate attacks in the north of the country by the Boko Haram Islamist
insurgency. The country’s foreign reserves have fallen to less than $27
billion, the lowest since 2005. The International Monetary Fund expects
the economy to expand 2.3 percent this year, the weakest growth since
1999.
"Lower oil prices have
meant that the poorer oil-producing countries don’t have enough money to
pay for social services,” said Ehsan Ul-Haq, senior oil analyst at KBC
Process Technology Ltd. “Protests are increasing as a result."
Force Majeure
In
February, Royal Dutch Shell Plc declared force majeure -- a legal
clause that allows it to stop shipments without breaching contracts --
after an attack on a pipeline feeding the Forcados terminal, which
typically exports about 200,000 barrels a day.
The International
Energy Agency estimated last month that Nigeria could lose an estimated
$1 billion in revenue by May, when it expects repairs on Forcados to be
completed. The terminal may not restart until June, Nigerian Oil
Minister Emmanuel Kachikwu said April 20.
Major oil companies like
Shell, Chevron, Total SA, Eni SpA and ConocoPhillips, which for five
decades dominated the Nigerian oil industry, have been selling onshore
and shallow water oil fields in the Niger delta to local companies,
concentrating their investments in deep-water fields outside the reach
of militants.
"If prices remain low, we will see more and more problems including these kind of sabotage attacks," said Ul-Haq.
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