13 July 2009

Nigeria: Country's 40 Billion Barrels Reserve Target Threatened

Lagos — The Nigeria's drive to grow its oil reserves to 40 billion barrels in 2010 is under threat, as the Niger Delta crisis hampers further exploration activities in the oil-rich region.

Explorationists in Nigeria have already stated that the crisis was capable of truncating the nation's quest to grow.

Nigeria has recently suffered many attacks on oil installations, which have plummeted the country's production level to below 1 million barrels per day.

President of the National Association of Petroleum Explorationists (NAPE), Victor Agbe-Davies, said in an interview with ***Daily Independent ***that unless something is urgently done, the country's dream of 40 billion barrels target will not be realised.

Development in the exploration activities, he said, was capable of truncating the nation's quest to grow.

The Movement for the Emancipation of the Niger Delta (MEND) in the last three months extended its fight against the Federal Government to the oil companies.

In all, about 132 oil fields were said to have been shut while the country is currently losing about 1 million barrels of crude oil per day.

Nigeria's current production is within the region of 1.1 barrel per day of crude and thus puncturing the country's quest to realise 4 million barrel of crude oil by 2010.

A recent document by the Department of Petroleum Resources gave the performance chart of the nation's downstream and upstream industry for the first quarter of the year, January to March, saying the nation's average daily production rate was 2,080,132 bpd and 2,024,418bopd for the months of January and February 2009.

174 fields, the agency said, were on production while 127 remained shut-in.

Continuing the document said that the non-reconciled production deferment for January and February 2009 was 1,101,488; translating to 475,705bopd deferred in January while 625,783bopd was deferred in February.

It however, blamed the large deferments figure on the militants' activities and operational hitches.

MEND had recently attacked Afremo B oil platform of Shell Petroleum Development Company (SPDC) in retaliation for the alleged invasion of an Ijaw community in Warri South-west Local Government Area of Delta State by the military Joint Task Force (JTF) penultimate Thursday.

MEND had three Sundays back attacked Shell pipelines at Adamakiri and Kula, both in Rivers State in the Eastern Niger Delta.

It said it had also attacked the Afremo offshore oilfields, which it believed were operated by Shell, and which it said were 14 miles (23 kilometres) from an export terminal through which oil from Shell's Forcados fields was pumped.

The attacks are the first to strike Rivers State, the Easternmost of the three main states in the Niger Delta, since the militants launched their latest campaign of sabotage following a military offensive in the western delta last month.

Persistent attacks by Mend over the past three years have cut oil output in the OPEC member, the world's eighth biggest oil exporter, to less than two thirds of its installed capacity of 3 million barrels per day.

MEND first burst onto the scene in 2006, knocking out more than a quarter of Nigeria's oil output -then around 2.4 million bpd -in a matter of weeks.

Italian oil giant, Agip, had said that a pipeline attack in Bayelsa State had halted production of around 33,000 barrels of oil and 2 million cubic metres of gas per day.

Similarly, Shell said some oil production had been halted following an attack on the Trans Ramos pipeline penultimate Wednesday at Aghoro-2 community in Bayelsa State.

Chevron shut down its operations around Delta State after Mend's first attack in its latest campaign on 24 May, halting around 100,000 bpd.

Shell Petroleum Development Company, it said recorded the highest volume of deferment of 434,280bopd due to insecurity and gas flaring restriction while Mobil lost 87,752bopd due to attack in QIT.

According to the agency, during the period under review, the average capacity utilization of the nation's refineries was a paltry 18.9percent.

Nigeria's output, according to the Minister of State for Petroleum Resources, Odein Ajumogobia, had dropped drastically.

"It is something we are all sad about. Nigeria has a production capacity of 3.2 million barrels per day. Today, we are down to about less than half of that in terms of production, with over one million barrels per day down in production shut-ins," the minister lamented.

The unrest, analysts believed had cost the country its position as the seventh largest supplier of hydrocarbon to the United States of America, with the latest disclosure by the United States Energy Department Africa and Middle East Affairs, George Parson, that Angola was now the fifth supplier of hydrocarbon to the US, while Nigeria had dropped to number eight from its seventh position.

The period after the first quarter witnessed a large scale attacks on oil installations, kidnapping of oil workers, withdrawal of oil workers from field and the deployment of soldiers to the zone, 12 of whom were killed in the fracas.

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