The nation’s crude oil export has dropped by 150,000 per day as Shell Petroleum Development Company, SPDC, has suspended Bonny Light production. The stoppage was as a result of increased hostilities in the Niger Delta, which makes the region unsafe for operations, the company said in a statement yesterday.
“Shell Petroleum Development Company of Nigeria Ltd, SPDC, declared force majeure on Bonny Light exports effective 12:00hrs Nigerian Time, 10th May 2016, following a leak that led to the closure of Nembe Creek Trunk line for repairs by the operator, AITEO Eastern E & P Company Ltd,” the statement said. Consequently, crude oil prices rose slightly in the international market yesterday. For instance, the price of Brent, which is usually used to benchmark other prices rose from $45.04 to $45.52 per barrel. The price of WTI also rose from $44.09 to $44.66 per barrel.
Despite the leap in prices, there are indications that the nation may not generate much in terms of revenue because of low output. It was learnt that the nation’s output is currently hovering at less than 2.0 million per day. The Federal Government, in the 2016 budget, expects production of 2.2 million barrels per day at $38 per barrel. However, the company’s action was expected earlier in the week when it made it public that many officials were being withdrawn from the Niger Delta.
Investigations showed that the action was taken as its security report indicated that it was not safe anymore to keep personnel at the various locations in the region. A source in the company who preferred not to be named said: “We value our personnel more than any other single resource. That is why we have decided to withdraw them from the region.
“The staff are very important to us and we cannot afford to sacrifice them at the altar of oil production. “We have already informed the government about our decision and would continue to watch the region as well as work with others to ensure that peace returns to the region.” Shell, it was gathered, has been evacuating workers from Bonga since last weekend.
“The evacuation is being done in categories of workers and cadres,” Cogent Ojobor, chairman of the Warri branch of NUPENG said. “My members are yet to be evacuated.” A Shell spokesman said earlier that oil output was continuing at its oil fields while it was monitoring the security situation.
Earlier, Vice President, Yemi Osinbajo had also met with executives from Shell, France’s Total, and Italy’s Agip and Chevron.
