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Weekly UpdatesA highly-placed APS source in Abuja on Aug. 8 told APS Nigeria's crude oil output during the week was averaging 1.46m b/d, less than half the country's installed capacity, due to unrest in the Niger Delta which has caused petroleum installations to be seriously damaged. Although a 60-day truce and presidential amnesty went into effect on Aug. 6, the source say it would take weeks or months for production systems in the delta to be restored.
Nigeria has a crude oil and condensate production capacity of more than 3m b/d, of which about 2m b/d is onshore and 1m b/d is offshore. Since December 2005, Nigeria has experienced increased pipeline vandalism, kidnappings, and militant takeover of oil facilities in the delta.
Nigerian Petroleum Minister Rilwanu Lukman on July 21 told a meeting of the ruling Peoples Democratic Party (PDP) National Working Committee in Abuja that, due to the delta violence, crude oil production had dropped to 1.4-1.5m b/d, against a budget level of 2.2m b/d. Nigeria's OPEC production quota is 1.673m b/d.
The latest in a string of worrying pronouncements came on Aug. 5, when new Central Bank Governor Malam Lamido Sanusi told a conference in Kenya that crude oil production had fallen to about 1m b/d. Levi Ajuonuma, spokesman for the state-owned Nigerian National Petroleum Corp (NNPC), in July told the FT: "We are at around 800,000 [to] 1m [b/d]" of production. Bismarck Rewane, a well-connected investment banker then put the output at 800,000-1.1m b/d, adding: "Anything below 1m derails [Nigeria's] spending programmes and our response to the recession".
Shell, the biggest oil producer in Nigeria, has incurred most of shut-ins since 2003. But the other major producers have suffered from the violence as well. Of 606 oil and gas fields in the Niger Delta and adjacent offshore areas, 355 are onshore and 251 are offshore. Less than 100 oilfields are major producers and the rest are marginal.
There are two types of E&P licences issued n Nigeria: the Oil Prospecting Licence (OPL) and the Oil Mining Licence (OML) with validity periods ranging from five to 20 years, respectively. NNPC has to fund about 53% of the E&P expansion costs of the five main JVs, which produce the bulk of the country's oil and condensate output.
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