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Niger Delta Avengers Attacks: Oil Production Grounded In Bayelsa As Agip, Aiteo, Shut Down 140,000bpd

The attacks by the militant group Niger Delta Avengers (NDA) on oil installations in Bayelsa State have effectively grounded the operations of Agip, Aiteo and Shell, with production outages by Agip and Aiteo alone now put at 140,000 barrels daily as from May 2016.

At $48 per barrel, an estimated $6.72 million daily is lost by the two operators due to the attacks on oil export pipelines being operated by those two companies.

Aiteo, operator of the Nembe Creek Trunk Line, which conveys crude to the Bonny export terminal, came under attack by the NDA on May 28, and spokesman Shola Omole said the line has been shut down.

According to him, some 75,000 barrels in daily production was shut down as the line remained out of service.

The attack on the Nembe Creek Trunk Line, which Shell also relies on to evacuate crude from its oilfields in Bayelsa, compelled the company to declare a ‘force majeure’ on its Bonny Light crude blend.

‘Force majeure’ is a legal concept that absolves a company from legal liabilities arising from its inability to meet its contractual obligation due to reasons beyond its control.

Eni, parent company of Nigerian Agip Oil Company (NAOC) said the oil firm’s production has been cut by 65,000 barrels per day following Friday’s attack on its pipeline in Bayelsa.

Earlier attacks in the oilfield on May 18 and 24 resulted in a shutdown of some 5,200 barrels of Eni’s equity share of oil output.

An Eni spokesperson confirmed the development in a short email response to SaharaReporters today.

“The total deferred production due to the attack is 65,000 barrels of oil equivalent daily,” Eni’s Media Relations Unit confirmed.  “There is no further impact on production, since all production from the swamp area has already been stopped days ago.”

In the coming weeks, the production shut down will adversely affect derivation revenue accruable to the Bayelsa government as 13 per cent of crude sales revenue is paid to each oil-bearing state according to the volume produced within the month.

The Bayelsa government had lamented that the activities of the militants are inimical to the economic interests of the state, and condemned the attacks as they affected two crude lines from the state.

 As it stands, Agip, Shell, Aiteo and other oil firms operating oilfields in Bayelsa cannot export crude until the vandalized export lines are fixed, and there are no indications as to when repair work can commence or how long they might take.

Of equal significance, the NDA has warned the impacted oil firms to steer clear of the facilities and not to effect any repairs until their demands are met, and further stated that they launched another attack on the Forcados terminal to forestall repair of the facility.

Minister of State for Petroleum, Mr Ibe Kachikwu, stated on Thursday that Nigeria was producing 1.6 million barrels per day, but that excludes further production outages due to the attack on Agip, Chevron and Shell at the weekend. 


Niger Delta