ENI SPA+0.05
ON CLOSING, MAY 13
13.57EUR
ROYAL DUTCH SHELL PLC-A SHS+2.00
ON CLOSING, MAY 13
1726.00GBp

Drag your attention away from the Middle East for a moment. While policymakers have been focused on Saudi Arabia's oil market machinations, what really matters right now is happening 3,000 miles away in the Niger River delta.The country that was, until recently, Africa's biggest crude producer is slipping back into chaos. A wave of attacks and accidents have hit infrastructure, taking Nigeria's output down to 20-year lows.

Oil prices are responding, rising to their highest in more than six months. Part of this is explained by the International Energy Agency lifting demand estimates this week. But taking both things together, it's easy to doubt whether current oil surpluses are sustainable. With no solution in sight to the problems that beset the delta's creeks and mangrove swamps, production from onshore and shallow-water oil fields looks vulnerable. If the latest group of freedom fighters seeks to outdo its predecessors, then deepwater facilities may be at risk too.The Niger Delta Avengers have certainly been busy, forcing Shell's Forcados terminal to shut in about 250,000 barrels of daily exports; and breaching an offshore Chevron facility in the 160,000 barrels per day Escravos system. In April, ENI had to declare force majeure -- letting it stop shipments without breaching contracts -- on exports of its Brass River grade after a pipeline fire.

It's hard to see any long-term let-up given Nigeria's record on fixing this problem. The previous wave of discontent, which hit a peak in 2009, only came to an end when President Yar'Adua offered amnesty, training programs and monthly cash payments to nearly 30,000 militants, at a yearly cost of about $500 million. Some leaders of the Movement for the Emancipation of the Niger Delta (MEND), the militant group, got lucrative security contracts. But the failure to properly address local grievances means it was only a matter of time before another wave of angry young men took up the fight for a better deal for southern Nigeria. The crisis has been hastened by new president Muhammadu Buhari's termination of the ex-militants' security contracts and his seeking the arrest of former MEND leaders. The Avengers now say they want independence for the Niger Delta. And it's not as if Nigeria's oil woes are limited to the militants. Exxon had to declare force majeure on Qua Iboe exports after a drilling platform ran aground and ruptured a pipeline, while Shell did similar with Bonny Light exports after a leak from a pipeline feeding the terminal.

Nigeria's Export Streams Four of the five largest streams are partly or totally suspended

In its latest report, the IEA assessed the world's need for OPEC crude this quarter at 31.9 million barrels a day, with Nigeria contributing 1.62 million to the group's 32.76 million output in April. Petromatrix, an oil research group, believes Nigerian production may now be little more than 1 million barrels per day. It won't take much more disruption to tip the global oil balance from surplus to deficit.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Julian Lee in London at jlee1627@bloomberg.net


http://www.bloomberg.com/gadfly/articles/2016-05-15/nigeria-s-a-bigger-worry-for-oil-than-saudi-arabia?.

This is just the beginning.

Nigeria will surely move forward.

Cc. Lalasticlala, mynd44, I hope you are still awake.

Which way forward?

This Militant guys are wicket. There should allow this government to implement it change agenda.

I think this Niger Delta Avengers thing is a ruse.
It is a govt's covert operation to shoot up the price of oil.
However, they won't come out openly to admit such, they'd blame the NDA but meanwhile, the Govt is the one doing it.
The Govt benefits in the long run when the price of oil shoots up.

Read the hands of the American and Europeans in the game.

Jaraworldsms:
This Militant guys are wicket. There should allow this government to implement it change agenda.

You are right. Just like Boko Haram allowed previous government to implement Transformation Agenda.

This huge, enigmatic, blundering nation never learnt any lesson in its lifespan. It glibly talks diversification megalomaniacally while in reality it naively dreams a resurgence of an oil windfall monocultural economy..
To quote my dad 'The cat sleeps but still dreams of tantalizing chickens' holds true here.

SStory

Bloomberg loves to write bad news on Nigeria economy.

They could wish us to fail, but we would ultimately disappoint them.

[s]

worksmart:
Bloomberg loves to write bad news on Nigeria economy.

They could wish us to fail, but we would ultimately disappoint them.

[/s]


Trash.

jerseyboy:


Thank Heavens Bloomberg referred to them as 'FREEDOM FIGHTERS'.

My man I dey tells you. De something they sweet my belle so, I hope NDA will draw consolation that they are being seen by the civilized world as freedom fighter, and as such must not relent in their activties against the Nigerian state.

Buhari has bitten more than he can chew. thank God international observers are taking notice of his failures. he has shot himself on the leg the second time just like that northern senator.

Barrister Akpors who’s gone to the village
for Xmas celebration went hunting in a
nearby village. He shot and dropped a bird, but it fell into
a farmer’s field on the other side of a
fence. As Barrister Akpors climbed over the
fence, an elderly gentleman asked him
what he was doing. He responded, “I shot a duck and it fell in
this field, I’m going in to retrieve it.” The old farmer replied, “This is my
property, and you are not coming over
here.” Arrogant Akpors said, “I am one of the
best trial attorneys in this country, and, if
you don’t let me get that duck, I’ll sue you
and take everything!” The old farmer smiled and said,
“Apparently, you don’t know how we do
things here. We settle small disagreements
like this with the Three-Kick Rule.” Barrister Akpors asked, “What is the
three-Kick Rule?” The Farmer replied, “Well, first I kick you
three times and then you kick me three
times, and so on, back and forth, until
someone gives up.” Barrister Akpors quickly thought about
the proposed contest and decided that he
could easily take the old farmer. He agreed to abide by the local custom. The old farmer slowly walked up to him. His first kick planted the toe of his heavy
work boot into Akpor’s groin and
dropped him to his knees. His second kick nearly wiped Akpors’
nose off his face. Barrister Akpors was flat on his belly
when the farmer’s third kick to a kidney
nearly caused him to give up. He eventually summoned every bit of his
will and managed to get to his feet and
said, “Okay, you old farmer, now it’s my turn.” The farmer smiled and said, “Now, I give up. You can have the duck.”