• 11 hours Russia Approves Profit-Based Oil Tax For 2019
  • 15 hours French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 17 hours Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 19 hours Oil Production Cuts Taking A Toll On Russia’s Economy
  • 21 hours Aramco In Talks With Chinese Petrochemical Producers
  • 22 hours Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 23 hours Maduro Names Chavez’ Cousin As Citgo Boss
  • 1 day Bidding Action Heats Up In UK’s Continental Shelf
  • 1 day Keystone Pipeline Restart Still Unknown
  • 2 days UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 2 days Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 2 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 3 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 3 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 3 days Thanksgiving Gas Prices At 3-Year High
  • 4 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 4 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 4 days ConocoPhillips Sets Price Ceiling For New Projects
  • 6 days Shell Oil Trading Head Steps Down After 29 Years
  • 7 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 7 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 7 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 7 days Venezuela Officially In Default
  • 7 days Iran Prepares To Export LNG To Boost Trade Relations
  • 7 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 7 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 7 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 8 days Rosneft Announces Completion Of World’s Longest Well
Alt Text

Norway’s $35B Oil Stock Dump Could Hurt The Industry

The world’s largest sovereign wealth…

Alt Text

The Dangers Of A Bullish Oil Market

Geopolitical tensions continue to threaten…

Alt Text

The Undisputed Leader Of Tomorrow’s Oil & Gas Markets

According to the Executive Director…

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

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


Leave a comment

Leave a comment




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