Experts: Nigeria Risks Delayed Return as Africa’s Top Oil Producer

Niger Delta not Sambisa forest, IYC tells presidency

Chineme Okafor in Abuja

Nigeria may have to remain Africa’s second largest crude oil producer after Angola for now until it is able to find solutions to emerging security challenges threatening the industry in the Niger Delta, industry experts have said.

They said following the country’s loss of its position to Angola last week, that emerging trend in security breaches on export pipelines and other facilities in the Delta posed great setbacks to her getting back lost output levels in the immediate future.

They told THISDAY Tuesday in Abuja that the cost and time needed to restart production from the shut-ins at affected oil facilities were considerable factors that could also keep Angola’s production above Nigeria’s for now.

Their response to the development also came on a day the Ijaw Youth Council (IYC) told the federal government that its reported plan to designate oil vandals in the Delta as terrorists and deal with them like it is doing with Boko Haram was uncouth.

The group stressed that the region was not Sambisa forest and so does not need such measure.

Latest data from the April Monthly Oil Market Report (MOMR) of the Organisation of Petroleum Exporting Countries (OPEC) showed that Nigeria’s crude oil production fell by 67,000 barrels per day (bpd) in March from 1.744 million bpd 1.677mbpd, while Angola saw its oil output rise to 1.782mbpd within the same period.

The report reflects the continued shut-in of Nigeria’s popular crude grade Forcados following sabotage on the subsea Forcados pipeline and export terminal. While Vice President Yemi Osibanjo last week put the total loss per day at 250,000 barrels, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu earlier said it was 300,000bpd.

However, one of the experts, Dr. Timothy Okon who is the Group Chief Executive Officer of an economic think-tank, the International Institute for Petroleum, Energy Law and Policy (IIPELP) said the government would have to sort out the prevalent governance issues in the Niger Delta to allow for a steady production level.

Okon noted that other oil producers would be glad Nigeria is experiencing such production shut-ins.

“The loss is temporary and has to do with the break in Trans Forcados line and the force majeure that had been declared. However, the issue that surrounds production losses in Nigeria is multifaceted and this particular instance has to do with militancy which is related to some issues surrounding the Niger Delta and the president,” said Okon.

He further explained: “I think anytime you lose 250,000bpd of production, it is significant especially in terms of the current price levels, and so it is important for the income of the state, to deal with the issues immediately.

“Pipeline vandalism didn’t just start, it emanates from the failure in politics and governance in the Niger Delta and without making excuses for criminality, I think those issues have to be tackled at ground zero level which is the interaction of the local authorities with the state authorities.”