Workers at work in a Nigerian oil rig
Oil Production
The federal government on Tuesday announced its plan to dialogue with militant groups who have continued to blow up petroleum pipelines and disrupt crude oil production in the Niger Delta. This move, if it sails through, would halt Nigeria’s dwindling production volume, writes Chineme Okafor
The financial and operations report of the Nigerian National Petroleum Corporation (NNPC) for the month of March has shown that the country’s crude oil production level is not in a very good shape, owing to renewed insurgency in the Niger Delta.
According to the report, Nigeria’s crude oil production has dropped to its lowest monthly level since April 2015.
While output in the report stood at 57.43 million barrels for March, or just over 1.8 million barrels a day, down by more than 3 per cent from the over 2 million barrels a day that was recorded in the previous month, recent production figures disclosed by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, showed that the country now produces about 1.6 million barrels daily.
With this, Angola which produces an average of 1.84 million barrels daily has now overtaken Nigeria as the continent’s largest crude exporter.
Propelled by vandalism, production has gradually gone down with around 380,000 barrels per day of production shot in from a February attack on a sub-sea export pipeline, thus leading to deferral of all March oil export cargoes.
In acknowledging the impacts of the drop in production volume on the country’s economy, the NNPC said the sudden resurgence of militancy in the Delta was not a good omen for the country.
The corporation’s call for a halt in the disruptions was then followed by the disclosure by the federal government that it had set up a committee to engage militant groups who had continued to bomb oil production facilities in the Niger Delta.
Kachikwu explained that the move was aimed at halting the deadly attacks which have made Nigeria’s oil production drop to 1.6 million barrels per day (mbpd).
He said the team to dialogue with the militants will be coordinated by the Office of the National Security Adviser (ONSA), and it will include himself, the Minister of Niger Delta Affairs, Usani Uguru; and select thoughts leaders; kings and influential individuals from the Niger Delta.
According to him, the government will take its time to engage the militants to halt their activities which has seen the country’s oil production drop in volumes frequently.
“The president has appointed a team led by the NSA and I serve in one of those, to begin the process of a very intensive dialogue with those caught in the middle of this,” said Kachikwu.
He further stated: “I am sure that in the ensuing one week the intensity of that dialogue will wrap up.”
To allow for the dialogue, Kachikwu said: “The NSA is going to be working with the various arms of the armed forces to descale the intensity of military intervention in the area within a week or two so that dialogue can take place.”
“We are making contacts with everybody who is involved, the ones that we can identity, through them, the ones that we can’t identify so that there is a lot more inclusiveness in this dialogue.
“Our prayer is that this works so that we resort to dialogue rather than use of force,” he added.
Speaking more on the character of people who would be part of the dialogue, Kachikwu said: “In terms of those on the committee, the NSA, myself, the service chiefs, the list itself is expanding as we put the final touches in place.
“There will be obviously the minister of the Niger Delta, we are also looking at an integrated platform that involves representatives of the various communities who are respected and have had experience in doing this.”
The minister said: “Over the last two months we have probably lost about 600,000 barrels from various attacks of militants in the area.”
Hopes of production recovery
However, Kachikwu maintained the country still produced between 1.5 and 1.6 million barrels of oil per day even with the huge drop. He also expressed hopes that the proposed dialogue will end the production disruption.
This is even with reports that the arrowhead of the disruptions, the Niger Delta Avengers (NDA) have said they were not willing to engage in such dialogue with the government.
“In terms of production, we are roughly at about 1.5 million – 1.6 million barrels a day, down from 2.2mbd which is the basis of this year’s budget and if peace reigns, obviously between now and August we will be able to recover substantial portion of this production so that the budget doesn’t suffer.
“We are making efforts to see how we can get those barrels back but different from getting the barrels back is getting the minds and hearts of people. When citizens are unhappy about something you need to engage,” he added.
He further said in his appeals to the militants: “My first appeal will be to my brothers who are engaged in these acts of protest to sheath the sword and dagger and get back to the table so that we can have conversation as Nigerians.
The minister noted: “There is no doubt that over the very many decades of oil production a lot of things that ought to be done in the oil geographical environment may well not have been fully done but not to forget that quite a lot has also happened. The answer to the issue will not be taking up of arms; the federal government is committed to continuing this dialogue.”
