Nigeria cuts daily crude output by 26 %

Jul 31, 2006 02:00 AM

Crude production in Nigeria has been cut down by a total of about 675,000 bpd, or 26 % of the country's normal daily output. According to agency reports, the cut is a result of recent militant attacks in the Niger Delta and a pipeline leak there, the source said.
Royal Dutch Shell said that a leak to an oil pipeline in southern Nigeria had cut output there by 180,000 bpd. The leak, at a pipeline partly operated by the Anglo-Dutch giant, came as Nigeria was already experiencing severely reduced oil production owing to unrest in the Niger Delta.

As a result of the leak, whose cause remains unclear, Shell declared a force majeure on crude deliveries from the Bonny oilfield for July and August, meaning that contracts might not be honoured during those two months.
The source said that, in addition to the 180,000 bpd offline in the eastern part of the Delta, there were also 477,000 barrels offline in the Western region. On top of this, 18,000 barrels were shut in on the Cawthorne Channel, which is in the eastern part of the Delta and is some 30 km from Port Harcourt, the source added.

Together, the three incidents have cut output by 675,000 barrels of crude per day. However, the calculation does not take account of a recent attack at an oil pumping plant operated by Italian energy group ENI. ENI had said that armed men attacked the Ogbainbiri plant in southern Nigeria, which has an extraction capacity of 35,000 barrels of crude per day.
Under normal circumstances, Nigeria's daily output totals 2.6 mm bpd. Aggrieved militants and communities in oil-rich southern Niger Delta have since the beginning of this year intensified violent actions against foreign oil workers and installations.

Some 25 security personnel have been killed since January when separatist militants seeking local control of Nigeria's multi-billion-dollar oil and gas resources launched attacks on oil firms and personnel in the region. At least 32 expatriate oil workers have also been kidnapped but all have been released unharmed after days or weeks in captivity.
Nigeria is Africa's largest producer and the world's sixth largest crude exporter.

Source: This Day
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