• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 5 hours Oil prices going Up? NO!
  • 15 hours Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 14 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 8 mins The Tony Seba report
  • 20 hours Oil prices going down
  • 22 hours Could oil demand collapse rapidly? Yup, sure could.
  • 1 hour Saudi Arabia turns to solar
  • 13 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 2 days Oil Buyers Club
  • 7 hours Kenya Eyes 200+ Oil Wells
  • 7 hours Are Electric Vehicles Really Better For The Environment?
  • 2 days Gazprom Exports to EU Hit Record
  • 2 days Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 22 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 2 days Could Venezuela become a net oil importer?
  • 21 hours Tesla Closing a Dozen Solar Facilities in Nine States
Alt Text

3 Possible Outcomes From The OPEC Meeting

With the OPEC meeting nearing,…

Alt Text

Global Energy Consumption Soars To New Heights

The new BP Statistical Review…

Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

More Info

Trending Discussions

Wave Of Violence Causes Nigerian Oil Output To Fall To 20 Year Lows

Nigerian Pipeline Attacked

The oil markets have suddenly been hit with a multitude of unexpected supply disruptions, the largest of which comes from the more than 1 million barrels per day that have been knocked offline because of wildfires in Canada. However, the outages in Canada are expected to be temporary – projects will restart once the fires are brought under control and oil workers can return to their sites.

Nigeria, on the other hand, is suffering some oil supply outages that threaten to be a little longer lasting. It began in February when a major oil pipeline that connects to the Forcados export terminal, which exports around 250,000 barrels per day, suffered an attack from a militant group known as the Niger Delta Avengers. Shell declared force majeure on exports from the Forcados terminal. Nigeria lost the export volume, an outage that the IEA projects will cost the country $1 billion in revenue for the month of May. Nigeria hopes the terminal will be able to restart in June. Related: Turkey, At Energy Crossroads, Sliding Towards Authoritarianism

But the attacks are picking up pace. Last week Chevron saw one of its offshore platforms attacked in the Niger Delta, disrupting 90,000 barrels per day of oil production. The Okan facility, which it operates in conjunction with the Nigerian National Petroleum Corp., is also a gathering point for production from several fields, so the attack knocked off output from all of them at once. The “Okan offshore facility in the Western Niger Delta region was breached by unknown persons," Chevron said in the statement. "The facility is currently shut-in and we are assessing the situation, and have deployed resources to respond to a resulting spill." The disruption could also lead to natural gas shortages at nearby power plants, according to Nigeria’s largest electricity company.

A Nigerian oil workers’ union said that staff should be evacuated from the Niger Delta after a string of attacks on pipelines and other oil infrastructure. "Best thing for any reasonable company to do is evacuate its workforce," Cogent Ojobor, chairman of a branch of the Nupeng oil labor union said in an interview with Reuters. Nigeria’s oil production has fallen to 1.7 million barrels per day (mb/d) because of the attacks, its lowest level in more than two decades. The decline means that Nigeria is fallen behind Angola as Africa’s largest oil producer. Related: Saudi Arabia To List Aramco Shares In New York, London, Hong Kong

Shell responded to the latest attacks with a decision to evacuate 100 employees from its Eja and Bonga facilities, as a precautionary measure. It was unclear if the Eja, which is located 10 miles offshore and produces 90,000 barrels per day, lost output. A spokesperson for Shell’s Nigerian subsidiary said that operations at the Bonga field will continue.

Attacks on oil pipelines and production facilities in the Niger Delta are nothing new. People living in the Niger Delta region have suffered from poverty and the environmental fallout from oil production for decades. Nigeria sources about 70 percent of its national income from oil production, but people living in the region still live in poverty. That has fueled resentment, crime, and at times blowback against the oil companies operating in the Delta. Between 2006 and 2009, the Delta was hit with armed conflict over oil. One of the key demands of the latest group, the Niger Delta Avengers, is for a greater share of oil revenues to reach local communities.

The timing for Nigeria could not be worse. The collapse of oil prices is cutting deeply into government revenues. Nigeria’s cash reserves have plummeted below $27 billion, its lowest level in more than a decade as the country fights to maintain the stability of its currency. That has led to a shortage of dollars, which in turn, has led to shortages of basic goods, including fuel. Tensions continue to boil over. Related: A Glimpse Into What Saudi Arabia’s New Oil Policy Will Look Like

“The government needs to address this very quickly,” Chika Onuebgu of the Trade Union Congress of Nigeria told Bloomberg in an interview. “Insecurity is becoming a big problem in the Niger Delta with the return of these attacks.”

It’s “highly likely that violence will escalate in the Niger Delta as the government increases its military presence and the militants respond with further attacks,” BMI Research said in a research note. “In the short term, more oil and gas installations will be targeted.”

By Nick Cunningham of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News