Nigeria’s crude oil output rises to 1.9mbd

*Offshore oil rig.

*Offshore oil rig.

Ike Amos 

01 July 2016, Sweetcrude, Lagos — Nigerian crude oil and condensate output has risen to around 1.9 million barrels per day, according to a report by Argus Energy, a global energy and commodity news, data and analysis services company.

The report also disclosed that July loading dates for Erha have finally emerged, adding four cargoes with one million barrels capacity to the export programme.

The report stated that this addition brings the July shipments of Nigerian crude to around 1.76 million barrels per day on 57 cargoes.

It further stated that Nigeria’s 125,000 barrels per day capacity Warri refinery and 210,000 barrels per day capacity Port Harcourt refinery are both operating after intermittent shutdowns, although well below their installed capacity.

The International Energy Agency (IEA) had last month stated that that Nigeria’s crude oil output fell to 1.37 million barrels per day in May, its lowest level since 1988, as a result of a wave of attacks on oil pipelines by rebel group the Niger Delta Avengers (NDA), which is demanding greater investment in the delta.

The Argus report, however, noted that force majeure remains in place on three key Nigerian export grades — Bonny Light, Brass River and Forcados, adding that Forcados had been completely shut in since February, when the Niger Delta Avengers (NDA) sabotaged the main export pipeline that was pumping around 250,000 barrels per day at the time.

“But output is gradually returning to normal, with no attacks reported since 15 June. Nigeria’s oil minister Emmanuel Ibe Kachikwu said talks between the Nigerian government, rebel groups and host oil and gas communities in the Niger delta were making progress,” the report said.

The Erha programme, the report said, had been repeatedly delayed in recent months, with operator ExxonMobil in dispute with Nigerian state oil firm NNPC about the latter’s entitlement.
Kachikwu, had a few days ago, stated that Nigeria’s crude oil output had risen to 1.9 million barrels per day and would rise further to 2.2 million barrels by next month when repairs are completed on some of the damaged pipelines.

Kachikwu had debunked reports that Nigeria’s crude oil production had recorded significant decline over the last couple of months, stating that from January right to April of this year, Nigeria was producing an average of 1.9 million to 2.2 million barrels per day, which is basically within the threshold of 2.2 million barrels that was budgeted for the year.

He, however, noted that in the months of May and June, the country suffered a lot of militant attacks which took the country’s crude oil output down from about 2.2 million to 1.3 million barrels.

On ways to shore up the country’s oil output, he said, “We have managed to have begin to lead conversation with the militants. A lot of engagement is taking place on the authorization of His Excellency, President Muhammadu Buhari; we have been able to get production up back to about 1.8 million to 1.9 million barrels per day as of two days ago. We are continuing those conversations.

“By the time the Forcados pipeline is repaired, in July, we should be able to come back to expected production ceiling for this year, which is 2.2 million barrels and begin to look if we can increase a bit, to enable us to cover the gap of the two to three months hiatus that we had.

“Things are looking up, engagements are trending positively, and we have been able to make in-road into those conversations. But what is more important is the need to continue that momentum and to look for a long-term solution to the Niger Delta crisis that continues to create the militancy difficulties that we had.”

mn b/d, according to Argus estimates, following a lull in violence against oil infrastructure in the producing Niger delta region.

The IEA said last month that Nigeria’s crude output fell to 1.37mn b/d in May, its lowest level since 1988, as a result of a wave of attacks on oil pipelines by rebel group the Niger Delta Avengers (NDA), which is demanding greater investment in the delta.

Force majeure remains in place on three key Nigerian export grades — Bonny Light, Brass River and Forcados. The latter has been completely shut in since February when the NDA sabotaged the main Forcados export pipeline that was pumping around 250,000 b/d at the time.

But the output is gradually returning to normal, with no attacks reported since 15 June. Nigeria’s oil minister Emmanuel Ibe Kachikwu said talks between the Nigerian government, rebel groups and host oil and gas communities in the Niger delta were making progress.

July loading dates for Erha field have finally emerged, adding four 1mn bl cargoes to the export programme, bringing July shipments of Nigerian crude to around 1.76mn b/d on 57 cargoes. The Erha programme has been repeatedly delayed in recent months, with operator ExxonMobil in dispute with Nigerian state oil firm NNPC about the latter’s entitlement.

Nigeria’s 125,000 b/d capacity Warri refinery and 210,000 b/d capacity Port Harcourt refinery are both operating after intermittent shutdowns, although at well below capacity.

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