– Nigeria’s progress in curbing militant attacks hasn’t much boosted its oil output
– This is bad news for a country mired in its worst economic slump in 25 years
– Although it is making life easier for fellow Organization of Petroleum Exporting Countries (OPEC) members
A report by Bloomberg indicates that Nigeria hasn’t much boosted its oil output even as militancy in Niger Delta has reduced.
Nigeria’s oil minister, Dr Ibe Kachikwu
According to the report, Nigeria was pumping about 1.5 million barrels a day late last month, 30 percent below what it was hoping to achieve and only a modest recovery from an almost 30-year low of 1.4 million in August 2016.
While peace efforts by the federal government have curbed the frequency of attacks in the Niger Delta, the Forcados export terminal, Nigeria’s third largest, remains closed and shipments are down at many others.
If these disruptions persist they could have an unintended consequence: helping the OPEC countries boost oil prices.
Nigeria’s oil output since 2011
Charles Swabey, an oil and gas analyst at BMI Research said: “Bringing the Forcados loading terminal back into action is key for Nigeria’s exports, If the government follows through on the peace process, then Nigeria could become “a drag” on OPEC’s push to rebalance the market and will likely slow the process down.”
When OPEC and 11 other producers forged an accord in December to reduce their production to eliminate a global oversupply, Nigeria and Libya were exempted because of conflicts in the countries.
A significant production increase from either nation would make it harder for the group to fulfill its pledge to reduce output by almost 4 percent.
Nigeria’s minister of state for petroleum, Dr Ibe Kachikwu has repeatedly said there would be a peace dividend in terms of improved oil-production. In November, the minister was targeting output of 2.2 million barrels by the end of 2016.
According to a data compiled by Bloomberg, while Nigeria’s output recovered to an average of 1.64 million barrels last month from 1.5 million in December, that’s still well below the 2015 average of 1.99 million barrels a day.
Nigeria struggling to boost its oil output
Even before the resurgence of militant activity, Nigeria was struggling as a result of low oil prices
“I am not sure we’re on that path where one can confidently say there’s clear indication of dialogue,” said Ledum Mitee, a lawyer and minority-rights activist directly involved in the peace talk by the Nigerian government.
“In spite of this, we have been meeting and trying to appeal to the grassroots that the peace should be maintained, but the situation could worsen if the militants think they’re not being taken seriously,” he said.
“I see the federal government engaging the region more constructively,” Dolapo Oni, Lagos-based head of Ecobank Energy Research, said by e-mail.
A recent visit by Vice President Yemi Osinbajo to the Niger Delta is likely to continue until there a deal is reached.
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