Nigeria has been losing 500,000 barrels per day (bpd) of crude oil, the Department for Petroleum Resources (DPR) reports, due to heavy flooding in the Niger Delta region.
Many oil-rich areas of Nigeria, particularly in the Niger-Delta region, have experienced severe flooding over recent weeks resulting in the submersion of important oil fields and production facilities.
Speaking at the DPR’s quarterly briefing in Lagos on Tuesday, Director of the DPR Osten Olorunsola revealed that 500,000 bpd of oil output had been halted due to the heavy rains and consequent flooding, reports BusinessDay.
This has resulted in a fall in the country’s oil production to 2.1 million bdp down from the usual rate of production of 2.6 million bdp – a near 20 per cent decrease. However, production is slowly picking up as the waters recede. The country, which is Africa’s largest crude producer, has thus far experienced a daily financial loss in the region of 6.75 billion naira ($43 million).
Olorunsola disclosed that the losses were due mainly to damage incurred by producers Agip, Total and Stirling Energy, whose facilities have been completely submerged by flood waters.
Meanwhile, Royal Dutch Shell on Tuesday also revealed a halt to productions, declaring force majeure on outputs on the Bomu-Bonny Trunkline and the Brass Creek Trunkline; significantly curtailing the country’s exports of major crude grades Bonny and Forcados.
Shell has been victim of repeated attacks by oil thieves attempting to siphon oil off for sale locally but mostly on the global market; with recent reports by the Nigerian government suggesting gangs located in the Balkan countries and Singapore may be the main consumers of stolen Nigerian oil.
Oil theft has caused substantial damage to Shell’s pipelines, prompting Tuesday’s announcement of the halt in output while repairs are made to the damaged infrastructure. Together Bonny and Forcados outputs total 427,000 bpd – roughly one fifth of Nigeria’s crude oil production.
As such, the combination of production stoppages by Shell, Agip, Total and Stirling Energy will cause the country’s revenue to take a serious hit; with oil exports accounting for 95 per cent of government revenue.
