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The Oil Bulls Are Back

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Nigeria To Fight Pipeline Attacks With Incentives For Illegal Refiners

Pipelines

In a bid to clamp down on pipeline attacks and oil thefts, Nigeria’s oil minister Emmanuel Ibe Kachikwu is advancing plans to include illegal refineries in the Niger Delta in a new government initiative aimed at dissuading perpetrators from attacking oil infrastructure.

Speaking at the Nigerian Association of Energy Economics (NAEE) on Monday, Kachikwu outlined the government’s idea of grouping all illegal refiners in the Niger Delta into the so-called ‘modular refineries’ consortium concept.

According to Natural Gas World, Nigeria’s government decided last month to supply crude oil to illegal refineries at a ‘reasonable price’, as a kind of incentive to the illicit small refiners to stop them from trying to break pipelines or vandalize facilities to get oil.

Nigeria’s local media report that a group part of the Niger Delta Youth Coalition for Peace and Progress (NDYCPP), is calling upon the government to create a committee to identify and document local refineries in the Delta, so that the authorities have the full picture of the number and refining capacity of the local communities.

As early as at the beginning of April, Niger Delta states signaled that they were ready and open to discuss the modular refineries concept with the government and try to reach a solution to the oil theft and illegal refining.

Related: OPEC’s No.2 Plans Significant Raise In Crude Output Next Year

Pipeline vandalism and attacks, which have crippled Nigeria’s crude oil output in the past year and a half, were the reasons that won the country an exemption from OPEC’s production cuts.

Now Nigeria plans to increase its crude oil output. The country is planning to complete repair work on the Forcados pipeline and maintenance at the Bonga field by July. Following these, crude oil production should rise to 2.2 million barrels daily, from 1.27 million bpd in March. Last month’s figure was affected by maintenance at Bonga, which produces 225,000 bpd.

By Tsvetana Paraskova for Oilprice.com

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