Sunday, 2 October 2016

Unbelievable!!!! N36.8bn worth of gas lost to militant attacks..

The country and some oil companies lost at least N38.6bn in one month as gas production from joint venture assets and the Nigerian Petroleum Development Company dropped by 40.9 billion standard cubic feet in July.

The loss was as a result of production disruptions occasioned by the recent upsurge in militant attacks in the Niger Delta, mostly targeted at onshore and shallow water assets.
The latest monthly report from the Nigerian National Petroleum Corporation showed that 139.58 billion scf and 17.70 billion scf were produced from JV assets and NPDC assets, respectively in July, down from 173.8 billion scf and 24.4 billion scf in January.
With the price of natural gas put at $2.95 per 1,000 scf as of September 23, the difference of 40.9 billion scf translates to a loss of $120.7m or N36.8bn (using the official exchange rate of N305/dollar).
In February, when the Forcados export terminal was shut down following an attack on a subsea export pipeline, total gas production from JV and NPDC assets saw a decline of 15.85 billion scf over the previous month.
The NPDC’s gas production hit a low of 388.7 million scf per day in April, rising to 571.12 million scf in July.
The nation’s oil and gas production structure is majorly split between JVs onshore and in shallow water with foreign and local companies and Production Sharing Contracts in deep-water offshore.
Production from the PSCs were not affected by the militancy problem as production rose to 1.81 billion scfpd in April from 1.61 billion scfpd in January.
Total of 211.93 billion cubic feet of natural gas were produced in July, translating to an average daily production of 6.84 billion scfpd.
Out of the 205.90 billion scf of gas produced in July 2016, a total of 114.86 billion scf of gas was commercialised, comprising of 20.30 billion scf and 94.56 billion scf for the domestic and export markets, respectively.
The NNPC said the balance of 44.22 per cent was either re-injected, used as upstream fuel gas or flared, adding that the gas flare rate was 10.58 per cent (702.83 mmscfd) in July, compared with average gas flare rate of 8.87 per cent (668.91 mmscfd) for the period of August 2015 to July 2016.
According to the report, from the 654.78 mmscfd of gas supplied to the domestic market in July, about 405.47 mmscfd of gas, representing 61.93 per cent, was used for gas-fired power plants, while the balance of 249.31 mmscfd or 38.07 per cent was supplied to other industries.
The Petroleum Club noted in a statement that the current crisis in the Niger Delta had severely affected the Nigerian upstream oil and gas industry, combined with the global decline in oil prices.
It said, “Fifty to 80 per cent of traditional onshore/shallow water oil production, which yields the highest government revenue per barrel, has been shut down over the past half year. The bulk of the 1.2 to 1.5 million barrels of oil per day produced over this period comes from the deep offshore, which yields significantly less revenue accruing to all levels of government.
“The collateral damage resulting from this oil production disruption is that some 25 to 40 per cent of domestic gas production is also breached, leading to severe reductions in electricity generation and distribution.”
The group noted that the disruption had also led to substantially reduced activity level in the industry.
It added, “This in turn has had a knock-on effect on contractors, service providers, banks and business partners, resulting in severe job losses and an indefinite freeze on further job creation possibilities.
“The current crisis in the Niger Delta must be quickly arrested through a carefully developed combination of engagements, dialogue, disarmament and ultimate restoration of law and order in the region.”
Commenting on the militancy problem in an interview with Bloomberg, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said the government was doing all it could to tackle the issue.
He said, “There is a two-pronged approach, and the first is obviously dialogue, which is uppermost. I think with a realistic, robust and aggressive dialogue, we should be able to find a solution to this. There are some concerns that maybe government isn’t engaging as much as it should, and we are working very hard to cover that gap.
“But the second is that at the end of the day, you have got to have also a robust military response, not in terms of real strike or attacks, but in terms of being able to respond in cases where you have sorts of surprises.”
Source PUNCH.

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