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Renewed militancy costs Nigeria N356.6b in five months

Renewed militancy costs Nigeria N356.6b in five months

The renewed militancy in the Niger Delta have continued to hurt the Nigerian economy, as report say the shut down of the Shell’s Forcados export line has led to the loss of about $1.6 billion (N356.6 billion) in revenue.

Though the Minister of State for Petroleum Resources, Ibe Kachukwu, had earlier said the facility will come back on stream by the end of July, it has remained closed with no certain time for it to come back online.

It would be recalled that in February, Shell declared force majeure – a legal clause that allows it to stop shipments without breaching contracts – a week after militants blew up a pipeline feeding the Forcados export terminal. The incidence knocked off at least 250,000 barrels per day.

The International Energy Agency, IEA, in April, said Nigeria could lose an estimated $1 billion (N197 billion) in revenue by May, when repairs of the Forcados terminal was expected to be completed.

The IEA said, “The Forcados terminal in Delta State, one of Nigeria’s biggest terminals, was scheduled to load 250,000 barrels of crude per day. At $40 per barrel, Nigeria could stand to lose an estimated $1bn between February, when force majeure was declared, and May, when repairs are expected to be completed.”

Read also: Economy: Govs put us in this mess -Ex CBN boss

The Nigerian National Petroleum Corporation, NNPC, also said its exploration and production subsidiary, Nigerian Petroleum Development Company, NPDC, loss of revenue from February to April, was due to production shut-in, resulting in loss of entire NPDC’s revenue from crude oil sales of about N20bn occasioned by vandalism of Forcados export line.

It also disclosed that the current attacks on oil facilities in the Niger Delta had negatively impacted on the Nigerian crude oil production output, making it to lose its African top crude oil producer status to Angola.

It said, “About 380,000 barrels per day remained shut in due to vandalism of the 48-inch subsea export line on February 15, 2016.

“Also, the nation has lost over 1,500MW of power supply to the damage as gas supply from Forcados, which is Nigeria’s major artery, accounts for 40 to 50 per cent of gas production. Incessant pipeline vandalism poses the greatest threat to the industry.”

By Timothy Enietan-Matthews

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We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
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