Nigerian oil output slumps to 1.676 mil b/d in March

 

http://www.platts.com/latest-news/oil/london/nigerian-oil-output-slumps-to-1676-mil-bd-in-26703510

Nigeria's crude oil and condensate production averaged 1.676 million b/d in March, a fall of over 200,000 b/d from the previous month, the country's petroleum ministry said Tuesday.

The ministry said the country's oil output was 1,676,045 b/d in March, down from around 1.9 million b/d in February, but it did not provide the reason for the sharp month-on-month fall.

However, sources close to the matter said output was down mainly due to maintenance at the Bonga field, which averages around 150,000-200,000 b/d.

Shell said in early-March that Bonga production would be shut in for about four to five weeks due to turnaround maintenance and engineering upgrades at the Bonga floating, production, storage and offloading (FPSO) vessel.

Nigerian oil production still remains sharply below its capacity of 2.2 million b/d, with the main export grade Forcados still shut in. But Nigerian oil output has recovered gradually this year as militant attacks have fallen substantially since early January after the government stepped up peace talks with leaders and youths in the Niger Delta to end militancy in the region.

OPEC EXEMPTION

Nigeria is currently exempt from the OPEC production cuts because of the issues it is facing with militancy in the oil rich Niger Delta.

The OPEC deal calls for the producer group to lower output by some 1.2 million b/d from October levels and freeze production at around 32.5 million b/d, while exempting Libya and Nigeria from any cuts.

The six-month deal, which expires in June, will be up for review at OPEC's next meeting on May 25, with some ministers saying the production cuts should be extended to continue drawing down global inventories.

Sources have said that with Nigeria restoring output, it could be asked to join the output cuts, if the deal is extended.

In late November oil minister Emmanuel Kachikwu acknowledged that a fully recovered Nigeria would likely be asked to share in the cuts.

"I don't expect that once you reach your volume you are going to have free rein, so we probably have six months to get our act together and then hopefully zoom back out production and then we will be asked to contribute," Kachikwu told reporters. "That is what I imagine."

The Trans Forcados pipeline is expected to re-open by the end of June, officials from pipeline operator Nigerian Petroleum Development Co. said earlier this year.

Sources have said producers in the region are keen to start exports from the main Forcados terminal as soon as possible, but the government remains cautious due to the fragile security situation.

Nigerian oil output plummeted to near 30-year lows of around 1.2 million b/d in May 2016 from 2.2 million b/d earlier in the year as attacks on oil facilities in the Niger Delta rose at an alarming pace due to resurgent militancy.

--Eklavya Gupte, eklavya.gupte@spglobal.com

--Edited by Jonathan Fox, jonathan.fox@spglobal.com