Chika Amanze-Nwachuku
6 December 2007
Singapore — Nigeria's crude oil production capacity has dropped by about 900,000 barrels per day, owing to the protracted crisis in the Niger Delta, as well as closure of some oil fields in the region's onshore and offshore.
THISDAY learnt that about 500,000bpd of crude oil are still being shut in as a result of the crises, while the closure of the oil fields is causing loss of another 400,000 bpd.
Minister of State for Petroleum, Mr Odein Ajumogobia, who confirmed the drop, said the implication is that in the mean time, "Nigeria does not have the additional capacity to increase crude oil production to the international market."
He said resolution of the problems responsible for the shut-in fields would enhance increase in supply of crude oil to the market from Nigeria.
The Central bank of Nigeria (CBN), in its 2007 First Half Year Report released last month, revealed that Nigeria 's crude oil production declined by 4.9 per cent in the first half of 2007.
The apex bank's report also disclosed that the country produced a total of 387.34 million barrels during the period, representing an average daily production of 2.14 million barrels.
The decline in production, according to the apex bank, was due to youth restiveness in the Niger Delta area, which led to the closedown of some oil production facilities.
According to the report, crude oil export in the first half of the year averaged 1.69 million barrels per day or 305.89 million barrels, against the 325.8 million barrels in corresponding period in 2006.
However, international analysts have called on other members of the Organisation of Petroleum Exporting Countries (OPEC) to support the move that the current crude oil supply to the global market should be maintained.
Mr Williams Edwards of Edwards Energy Consultants based in Katy, Texas, United States, attributed the surge in prices of crude oil in the last four years to the role of speculative trading.
He said OPEC should continue to provide the global market with necessary volume that would not impact negatively on investment.
While commending the organisation for responding to high prices with increase in production quota in the past after examination of necessary variables, the oil analyst urged member countries to continue to play their roles effectively.
"In the case of consumer nations, they are looking at the situation superficially, if the organisation announces an increase in supply of 500,000 bpd, they will see it as a good measure to make more crude oil available. This, however, would not be favourable to both of them in the long run," he warned.
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