Oil Price
0
All posts from Oil Price
Oil Price in Group,

Forcados Shut-In Dashes Nigeria’s Hopes Of Raising Oil Output In 2016

Just as Nigeria was starting to gradually increase its oil production over the past two months, fresh attacks on the Forcados pipeline earlier this month have dragged output down again, lessening the country’s chances to see its crude production materially increase this year.

Militant violence had slowed down over the past months, but with Forcados out again – just two days after it had reopened following an attack in July, Nigeria’s output will be down again, according to market sources quoted by Platts on Friday.

S&P Global Platts has estimated that Nigeria’s oil production increased to some 1.84 million bpd, including the Akpo condensate grade, in October. However, with Forcados – with production of between 150,000-200,000 bpd – out, the country’s total output would plunge for the remainder of 2016.

Last week, Nigeria’s most notorious militants sabotaging oil infrastructure, the Niger Delta Avengers (NDA), said they bombed the Trans Forcados pipeline in the third attack in just a week on the pipeline that carries crude oil from the delta to the Shell-operated terminal of the same name.

Forcados production was impacted more than initially thought it would be, and it is very likely that exports of the Forcados grade will be offline until early into 2017, trading sources told Platts.

An oil spill caused by a militant attack has been affecting the transportation of the crude oil, and has been hampering repairs.

According to Platts, a spokeswoman for Shell has declined to comment on the oil spill, but confirmed that Forcados was still under force majeure.

OPEC’s secondary sources put Nigeria’s crude oil production in October at 1.628 million bpd, up by 170,200 bpd from September. Commenting on the October production of OPEC and its members, the cartel said in its Monthly Oil Market Report released last week:

“Crude oil output increased the most in Nigeria, Libya and Iraq, while production in Angola showed the largest decline.”

With Forcados out, output in Nigeria would surely drop in November and December—a de facto production cut for OPEC, if you will, and perhaps a lucky break for the struggling cartel.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com: