Mohammed Barkindo, group managing director, Nigerian National Petroleum Corporation (NNPC), has recounted some of the impact of the militant attacks on the oil industry.
According to Barkindo, some of the impact of the three-year long attack includes crude oil capacity shut-in now about 1.7mb/d, power outage due to lack of gas, petroleum products scarcity and potential pump price increase in the case of deregulation.
Nigeria has lost N37 billion worth of petroleum products to militant attacks, which highlights the costly nature of the Niger Delta conflict, he said.
Of the said amount, N18 billion ($120 million) was the value of petroleum products lost as a result of the shut-in of flow stations belonging to different multinational oil companies.
The balance of about N19 billion was spent on the repair of oil facilities destroyed during the attacks, he said.
The repairs were carried out under the supervision of the NNPC.
Barkindo explained that the load shedding being experienced in the country is as a result of disruption of production activities by militants.
“The attacks on the infrastructure have been persistent in recent times, impacting oil, gas and petroleum products infrastructure,” said the NNPC boss.
”Some recent attacks on gas facilities include ELPS (Escravos-Warri) pipeline, attacked on May 14, Ogbolobo-Focados crude /condesent line attacked on June 12 and the recent attacks on Chevron facilities leading to complete severance of gas supply for Chevron. The combined effect of these attacks is power outage of about 1.1GW of electricity,” he explained.
The GMD, who spoke while delivering a lecture at the Chief of Naval Staff Annual Conference (CONSAC) in Uyo, the Akwa Ibom State capital, stated that the situation in the area had, however, improved tremendously as a result of the amnesty programme of the federal government?
But a sustained collaboration between the Nigerian Navy and oil companies would further consolidate Nigeria’s position in the Organisation of Petroleum Exporting Countries (OPEC), he declared.
Barkindo said that Nigeria’s hydrocarbon potential is enormous by global standards, explaining that crude oil reserves are estimated at about 35 billion barrels, while gas reserves are about 187 trillion cubic feet.
“On a global basis, Nigeria ranks within the first 10 in terms of crude oil reserve and within the top 12 in terms of daily crude oil production capacity in barrels of oil equivalent. This position underpins the importance of the Nigerian oil and gas industry both to Nigeria and to the world in general,” said Barkindo.
Nigeria is also planning a major expansion, whereby crude oil capacity is expected to grow to about three million barrels per day by 2015, he revealed.
He explained that the country must grow in order to be able to compete with other countries, particularly, Angola. Failure to grow would impact the country’s OPEC quota and consequently, revenue accruing from oil, he stated.