With a daily loss of over 800,000 barrels from a projected 2.2 million barrels of crude per day (bpd) Nigeria’s budget 2016 may be headed for doom as restiveness in the Niger Delta takes its toll on the industry.
Data at the disposal of Ripples Nigeria show that over 800, 000 barrels of crude oil are being lost daily since militants renewed agitation for resource control in the Niger Delta region. Already, Nigeria has reportedly lost its prime position as Africa’s leading oil producer to Angola, with the later gaining a 1.5 million barrels advantage in the last one month.
On Wednesday, the Finance Minister, Kemi Adeosun, admitted while presenting a picture of revenue allocation to the country’s federating units that the amount available for sharing in April had dropped by N18.2 billion. The figure was N281.500 billion, down from N299.747 in March, 2016.
Though she alluded to a sharp decline in oil prices as being largely responsible for dwindling earnings, it was evident that the oil industry was hemorrhaging from disruptions triggered by crippling attacks on oil platforms.
Nigeria has reportedly lost its prime position as Africa’s leading oil producer to Angola, with the later gaining a 1.5 million barrels advantage in the last one month.
On Thursday, the Minister of State for Petroleum, and head of the Nigerian National Petroleum Corporation (NNPC), Ibe Kachikwu, literarily went on his knees to draw President Buhari’s attention to a growing need to rework strategy.
Said he, “government needs to improve its amnesty programme for militants in Niger Delta to address neglect.
“The Niger Delta governors must be involved in providing lasting solutions to the resurgence of pipeline vandalism and there is urgent need to create business opportunities for the locals in the region,” Kachikwu said.
In sharp contrast to what many consider Buhari’s strong arm tactics, a committee set up by Delta state leaders warned also on Thursday that a military approach would not work, and called for restraint and dialogue as rising concerns clearly indicated a resolve by militants to ground the oil industry.
A promise by a new militant group, Niger Delta Avengers (NDA) to shut down significant portions of oil operations after a 7-day ultimatum was delivered late Wednesday night. Chevron Nigeria acknowledged early Thursday that its main electric field had been breached, causing a shutdown of the entire Escravos operation.
Other attacks have forced Shell and ENI to declare force majeure on exports of Bonny Light, Forcados and Brass River crude, while an accident at an ExxonMobil terminal also put Qua Iboe under force majeure. Fears of loading delays and cancellations have made international buyers reluctant to seek Nigerian crude.
The crisis of confidence is already hurting several aspects of the 2016 road map for a revitalization and stabilization of the economy. The planned restoration of petroleum refining capacity at Warri and Kaduna refineries have once again been stalled, though government is playing hush over the development.
Attacks have forced Shell and ENI to declare force majeure on exports of Bonny Light, Forcados and Brass River crude, while an accident at an ExxonMobil terminal also put Qua Iboe under force majeure
Ripples Nigeria had earlier reported that another round of scarcity of petroleum products was imminent as independent oil marketers scrounge for forex to import products from tankers already anchored off the country’s borders.
Early in the week, it was the aviation sector that quaked from pressure by foreign airlines seeking release of $575 million trapped in the Nigerian economy. United Airlines on Wednesday announced plans to cease direct flights to Houston, USA, from Nigeria due to its inability to remit earnings, a warning signal that others may follow suit and endanger the country’s air travel hub status.
A highly-placed presidency source confided in Ripples Nigeria that the government was making overtures to militants to stem the slide in oil production in spite of the bold face put up by the administration. Said he, “We realize that politics is at the heart of recent uprisings in the Niger Delta and we will deal with it politically.”
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