LAGOS – (AFP) – Flooding and
large-scale theft of crude drove
Nigerian oil output to the lowest
level for more than two years in
October, the IEA said on Tuesday,
highlighting challenges facing Africa’s biggest producer. Oil production in Nigeria fell to
1.95 million barrels per day in
October, the International
Energy Agency said in its monthly
report, with production in recent
months having ranged between 2.0 and 2.5 mbd. The drop from September to
October was around 110,000
barrels per day, it said, leaving
Nigerian production at “the
lowest level in around two and
half years.” It said: “By early November,
production levels were
recovering, with export
schedules showing increased
volumes for December.” It was enough to keep Nigeria as
Africa’s top producer ahead of
Angola at 1.79 million barrels per
day, but the drop comes amid
growing warnings that the
country must take action to avoid stagnant output in the
future. The IEA report cited heavy
flooding which hit Nigerian
production this rainy season as
well as the continuing problem of
large-scale and organised oil
theft in the continent’s most populous nation. It cited findings that “oil
bunkering, or theft, costs the
government an estimated $7
billion in lost revenue per year.”
By comparison, Nigeria’s annual
total budget is around $31 billion. Theft and sabotage often leads
to pipeline damage, causing oil
firms to cut output. Shell has
been Nigeria’s biggest producer,
with major firms such as Exxon,
Chevron and Total also present. Nigerian oil production sharply
rebounded after a 2009 amnesty
deal for militants in the Niger
Delta region following years of
unrest which had cut output by
around half for a period of time. However, future output is in
question over a number of
factors, including a long-stalled
overhaul of Nigeria’s oil industry
that has created uncertainty
among energy firms, freezing investment, as well as theft. Beyond that, a boost in
production in the United States —
the IEA believes the US will
become the world’s top oil
producer by 2020 — is also
expected to force Nigeria to hunt for new markets. The United
States has been a major buyer of
Nigerian oil exports. Nigeria’s government has been
seeking for years to pass
sweeping legislation to overhaul
its oil industry, widely seen as
riddled with corruption.
President Goodluck Jonathan sent a fresh version of the bill to
parliament in July, but lawmakers
are yet to take action. Uncertainty over new fiscal
terms in the industry has led to a
slowdown in new investments,
which could threaten future
production growth if not
resolved.
www.vanguardngr.com/2012/11/nigeria-loses-7b-to-oil-bunkering-yearly-iea/