Nigeria’s Petroleum Minister, Mrs Deziani Allison-Madueke
Nigeria’s oil production is set to rise to 2.5 million barrels a day in the next two weeks as repairs are completed on a major pipeline, a spokeswoman for the Nigerian National Petroleum Corporation,NNPC said in a statement Tuesday.
“In a fortnight, repair works on the Nembe Creek Trunk Line (NCTL) which has a daily capacity of 150,000 [barrels a day] is expected to be fully completed. On completion, daily average crude oil production is expected to increase to 2.50 [million barrels a day]” she said.
Shell Petroleum Development Company, a subsidiary of Royal Dutch Shell PLC (RDSA), shut the pipeline in April to remove crude oil theft connections and investigate suspected oil theft leaks. The pipeline’s closure caused SPDC to declare force majeure on its exports of Bonny Light crude oil.
Shell declined to comment on when repairs to the pipeline would complete.
Widespread incidences of oil theft and vandalism significantly dented Nigeria’s oil production in the first quarter of the year. According to NNPC, output in the first quarter fluctuated between 2.1 million and 2.3 million barrels a day, well below the forecast production level of 2.48 million barrels a day.
According to Nigeria’s submissions to the Organization of Petroleum Exporting Countries, its production this year has been even lower. OPEC figures show Nigeria’s output averaged 1.9 million barrels a day in the first quarter and was just 1.7 million barrels a day in June.
However, Mrs. Green said incidences of oil theft have decreased significantly and production volumes have improved since June thanks to a joint effort by the oil ministry, NNPC and international oil majors operating in the country. She added that the country’s production should increase further to 2.55 million barrels a day of oil and condensate for the rest of the year.
“All that is required is to continue the fight against pipeline vandalism and crude oil theft to achieve this target,” she said.
Meanwhile, the corporation faulted Royal Dutch Shell’s claims that it lost $700 million in its global earnings in the second quarter of 2013 due to operational challenges in Nigeria.
Mrs Green noted that the loss claimed by Shell, were not localised to Nigeria as reported by the media.
The Chief Executive Officer of Shell, Peter Voser, had said that higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria have hit the company’s bottom line resulting to a loss of about $700 million.
It was also reported that Shell planned to relinquish four more oil blocks in the country due to the harsh operating environment in the oil and gas sector.
Mrs Green said in the statement that the divestment by some multinational oil firms operating in the Niger Delta was not as a result of harsh operating environment and absence of good leadership in the oil industry.
According to her, mergers, acquisition and divestments is a global portfolio management strategy employed mostly by big corporations to restructure and reposition companies for better and efficient revenue growth and competition.
She therefore wondered why anybody could canvass such position when the multinational oil companies themselves, especially Shell, have repeatedly stated that part of the reasons for divestment of assets was a deliberate measure to encourage and promote indigenous participation in the upstream oil and gas industry.
Green added that acquisition of shale oil and gas assets in North America has also proven not to be good investments and as such, programmed for divestment to minimise risk.
She hinted: “In order to further buttress the global challenges, Shell’s current tight oil output is 50,000 bpd as against an estimated 250,000bpd in the United States.
“Against this backdrop, it is misleading to relate the strategic divestments as due to the absence of leadership in the oil industry. These divestments have in fact increased indigenous participation which will in turn create new job opportunities, reduce capital flight, encourage capacity building and support gas-based industrialization aspirations”.
She reiterated the corporation’s determination to work with all stakeholders in the oil and gas industry to ensure effective management of the nation’s vast hydrocarbon resource base.
