Contrary to official claims, the oil sector in Nigeria has suffered its worst fall as the country is said to have recorded a drop of about 250,000 barrels per day (bpd) since militants carried out an attack on the country’s major Trans Forcados Pipeline (TFP), on Wednesday.
The damage may compel Nigeria to renew force majeure for the supply of crude to buyers for the November 2016 contract, said a senior staff of the Nigeria National Petroleum Corporation (NNPC) on Thursday.
Nigeria’s projected production for the 2016 budget was put at of 2.2 million bpd, in which supply for February 2016 has been cut by about 700,000 bpd because of hostilities in the Niger Delta area.
Prices of crude oil, which was sliding at the international oil market, following fears that an anticipated rise in supply of the products from the West African country would have seen its output rising to about 2.3 million bpd stabilised on Thursday as the news of the attack was confirmed.
However, some of the major oil companies operating in the region are still counting their losses, with NNPC, Shell and Shoreline Oil Company reportedly confirming shutting in a minimum of 35,000 bpd of output each as a result of the pipeline bombing.
Other firms that receive supplies through the bombed pipelines include companies based in Lagos and two Lagos-based European companies.
Exports through Forcados that had just resumed in October were expected to continue but at a reduced rate.
Nigeria’s President Muhammadu Buhari met with leaders of the southern oil-producing Niger Delta region for the first time this week in a bid to negotiate an end to the new wave of militancy that began early this year.
The region’s population has felt disenfranchised for decades as it has benefited little from Nigeria’s vast oil wealth and has watched traditional livelihoods such as fishing decline due to pollution.
By Emma Eke….
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