Mounting oil losses to militancy

The effect of the recent military upsurge in the Niger Delta launched by the Federal Government through the Joint Task Force is already being felt with the nation recording deeper plunge in her daily crude oil production.

Another fuel queue may also emerge soon as the Kaduna and Warri refineries are not getting crude oil supply as a result of damage to pipelines supplying them.

The Nigeria National Petroleum Corporation (NNPC), said on Wednesday that the nation's average daily production output from its joint venture cash call, as at last Friday, stood at a reduced level of 1.3 million barrels per day, with local refineries running out of crude supplies due to upped vandalization by militants.

According to NNPC, the Port Harcourt and Warri refineries have been significantly affected by increase in attacks by militants since the military campaign began in May, 2009, forcing the refineries to shut down due to damages on the Nembe-Port Harcourt and Escravos-Chanomi pipelines respectively.

"Yes, what we currently have now is for 15 days sufficiency and after that it will finish," said Gabby Meheux, General Manager Technical, who represented the Group Managing Director, Sanusi Barkindo, at a sitting of the House of Representatives Ad hoc Committee on the Niger Delta crisis.

"The consequence is that no refining would take place. Therefore, no product would be available from Kaduna because the pipeline that would have supplied crude to Kaduna was vandalized and until it is repaired we cannot pump crude."

The explanation is that, due to the escalating incidences of such damage, the Warri refinery cannot supply Kaduna refinery, forcing it to resort to stored reserves that may be up and over in about 15 days.

Major targets of the militants since the operations started have been Shell BP, Chevron and Agip, with each recording a steeped oil amount per day, according to the corporation.

As the soldiers bombarded the creeks, searching for the militants and displacing many, with others killed, the runaway oil rebels who gave no open confrontation continued their best tactics against the government, damaging the oil lines and cutting production.

The oil multinationals have complained that their losses in the past month have been the heaviest in recent times.

"Since May 16 till date, that this crisis started, we have lost one third of our production capacity in West Africa and that is about 105,000 bpd," said Supo Shadiya, the Director, Chevron/NNPC Joint Venture.

He said most of the lines transporting crude and gas from their off-shore to on-shore bases have been affected hence crude could no longer be moved through them.

He added that their Wells in MKB-5 and Apiteye-1 have been vandalized while the later has been on fire since June 13.

"We have not been able to put off the fire because we cannot. The integrity of the Well has been compromised and we don't have the facility to control it. So we have brought in two Well Fire control specialists from abroad and they are still studying the fire and come with a solution on how to put it off", he told the committee.

The Managing Director of the Shell Petroleum Development Company, Oriseh Agbarah on his part, told the lawmakers that his company, which produced about 350,000 bpd before the military operation started is currently producing less than 200,000.

"We are doing less than 30,000 from the whole of Delta region", he said.