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Nigeria Loses 1.1m Barrels of Crude Weekly

Posted by By Mike Oduniyi on 2004/12/02 | Views: 426 |

Nigeria Loses 1.1m Barrels of Crude Weekly


Nigeria has been losing some 1.068 million barrels of crude oil every week in the last one month due to community-related crisis in the Niger Delta region, according to the Department of Petroleum Resources (DPR).

14 flowstations remained shut Oil prices rise again

Nigeria has been losing some 1.068 million barrels of crude oil every week in the last one month due to community-related crisis in the Niger Delta region, according to the Department of Petroleum Resources (DPR).

DPR, the nation's oil industry monitors, said in a report made available to THISDAY that the losses came from the shutdown of 14 flowstations belonging to Shell, ChevronTexaco and Elf Petroleum Nigeria Limited.

The significant cut in Nigeria's oil production and signs that the Organisation of Petroleum Exporting Countries (OPEC) may cut back its output quota when it meets next week, sent oil prices rising again to near $50 per barrel.

According to the DPR, six flowstations belonging to US oil major, ChevronTexaco. remained closed due to community-related problem, leading to losses of about 999,600 barrels of crude per week.

Shell, on the other hand, had four of its flowstations shut down due to community related problem and vandalisation. The Anglo/Dutch company's loss was put at 18,837 barrels of oil. Elf had four flowstations shut leading to the loss of 49,749 barrels of crude.

Adding the daily loss of 70,000 barrels of crude through theft perpetuated by illegal bunkerers, Nigeria's oil losses could total some 1.6 million barrels per week or 229,000 barrels per day (bpd). In monetary terms, the Nigerian government could be losing about $5.9 million daily in revenue, being its average 57 percent share in the deferred oil production.

Nigeria's current oil production capacity is put at about 2.6 million bpd. However, signs that the country was producing below this capacity started manifesting from last August when output dropped to 2.45 million bpd, which Petroleum Ministry officials attributed to technical problems at the producing fields.

The Central Bank of Nigeria (CBN) in its monthly report for last September, released last week, put oil production at 2.4 million bpd for the month. The apex bank further attributed the drop in inflow of foreign exchange during the month in review, to

0.7 percent fall in the oil sector receipt to $1.8 billion or about 63.7 percent of the total of $2.8 billion for the month.

Oil accounts for more than 90 percent of Nigeria foreign exchange income. The continued unrest in the oil producing Niger Delta has elicited strident calls from industry operators on the Federal Government to find a lasting solution to the problem.

Only last week, youths in the Warri area of Delta State engaged in a shoot-out with soldiers while allegedly trying to forcefully occupy an oil facility. Scores of people were injured in the fracas.

Meanwhile, crude oil prices climbed higher yesterday, with the Light sweet crude closing 26 cent high at $49.25 per barrel at the New York Exchange Market. The Brent also closed $1.03 higher at $45.60 per barrel.

Traders attributed the upswing in prices to fears that OPEC, which controls more than 40 percent of global oil supply, might slash its output ceiling when it meets next month in Cairo, Egypt.

Iran's OPEC Governor, Hossein Kazempour Ardebili said yesterday that the global oil market was oversupplied. "I would say that we in OPEC have to go back to our quota first because the market has two million bpd oversupply," he said.

OPEC has been producing at close to full capacity in a bid to meet the strongest oil demand growth in a generation.

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