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Oil pipeline attacks threaten survival of Nigerian economy

29 May 2018

The Nigerian economy may be on the verge of collapse over the spate of force majeure incidents, usually caused by attacks on oil company pipelines, according to the Lagos-based Daily Sun. With oil accounting for more than half of government revenue and 90% of export income, government programmes will be seriously compromised if revenues continue to shrink in the face of attacks on oil infrastructure.

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The Nigerian budget gave an oil production estimate of 2.3 million barrels per day in 2017, including condensates, but repeated force majeures brought actual production down to about 800,000 barrels per day.

The Nigerian National Petroleum Corporation (NNPC) disclosed that a total of 1,005 pipeline points were vandalised in 2017, and since the beginning of 2018, this situation has intensified.

SPDC, the Nigerian subsidiary of Royal Dutch Shell, declared force majeure on Bonny Light shipments on May 23 following the shutdown of the Nembe Creek Trunk Line (NCTL). Earlier, in April, the company confirmed four leak points on its Trans Ramos Pipeline in Delta State.

Prior to this, the nation’s crude shipments were already witnessing delays following a leak on the 200,000 to 240,000 bpd Trans-Forcados pipeline that shut down in mid-May, effectively cutting deliveries of Forcados, the country’s largest crude grade.

Security in parts of the Niger Delta remains a major concern with persisting incidents of criminality, kidnapping and vandalism as well as onshore and offshore piracy, according to the Daily Sun. Although there has been no damage to key oil and gas infrastructure caused by militant activity there since November 2016, the security situation remains volatile in this region of the country.

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