- As Oil prices hit $50 a barrel
Oil giant Chevron’s operations yesterday came under threat after another attack on its facility at the 18-inch Abiteye line in Warri South-West council area of Delta State.
Members of a militant group, the Niger Delta Avengers (NDA), destroyed a major crude oil facility, grounding Chevron’s swamp operations in the state.
The NDA, in a tweet, claimed responsibility for the attack, which is bound to alter oil production and, in effect, Nigeria’s revenue. The group tweeted: “We warned Chevron, but they didn’t listen. @NDAvengers just blew up the Escravos tank farm main electricity feed pipeline.”
The NDA explained that the oil facilities were sabotaged following attempts by Chevron to repair the main Escravos crude oil pipeline it blew up earlier.
Reuters quoted sources as saying that the company’s onshore operations in the Niger Delta had been shut down following the attack, which involved the main electricity line leading to its Escravos terminal.
“It is a crude line, which means all activities in Chevron are grounded,” the source told Reuters.
After the initial attack, the group had warned against moves to repair the facility until their demands were fully met.
The group’s spokesperson, Mudoch Agbinibo, had earlier this month warned the government of further attacks if their demands were not met.
Last week, Chevron’s Makaraba crude oil line was attacked on the offshore Okan manifold.
The attack followed previous ones on the company’s facilities at Abiteye, Utunana and Makaraba platforms in Warri South-West area of Delta State, resulting in the loss of over 40,000 barrels of oil per day.
Agip pipilines have repeatedly been vandalised in Bayelsa and Delta states recenlty.
The attack on pipelines and platforms cause daily loss of money amidst fall in global oil prices. It could also lead to a worsening of electricity supply because of its effect on gas supply. Most of Nigeria’s power plants use gas.
But oil price has risen above $50 a barrel — the first time in seven months.
The Nigeria National Petroleum Corporation (NNPC) also faces the problem of maintaining stability in the supply of petrol. It may lead to scarcity of poducts.
Residents said an explosion occurred on Wednesday night.
A community source, who had had an interaction with officials of the company, confirmed that the attack had grounded Chevron’s swamp activities.
The source said stakeholders from the state had been working on possible solutions to the situation, which has adversely affected the national economy, adding that those behind the attacks had been difficult to trail or identify.
“Chevron Abiteye 18-inch line, a crude oil line, was once again attacked last night. The Abiteye Escravos is the main line. I spoke with the Chevron superintendent, who confirmed it and that the entire operation of Chevron in the swamp has been totally shut down by the attack. That was the only remaining route before, but with this last attack, all Chevron’s operation is down, totally brought to zero.
“We are trying to now proffer a solution; what can we do, in spite of the advocacy committee’s visit and all that? The issue is that the people are not coming out like in the last agitation, where you knew where it was coming from, you could trace it to Camp 5, you could identify some leaders from the camps.
“In this one, you can’t identify anyone, they are using guerrilla tactics; they are no longer using either 200 or 75 horsepower speedboats, they now use smaller speedboats. They are now disguised in a different manner; now you can only see like two to three people, you’ll just think probably they are going somewhere, but they are rather causing problems and the funny thing is that they don’t move in the day time; they only move in the night,” he said.
When reached for confirmation and comment, Chevron’s General Manager )Policies, Government and Public Affairs) Deji Haastrup simply said: “ I am unable to comment at this time.”
Delta State Deputy Governor Kingsley Otuaro, at a news conference in Warri earlier in the week, said state government’s advocacy efforts had been helpful, adding that attacks on facilities could have been more than being already experienced.
“We can safely say, from the intelligence we have, that if this committee had not been put in place, we would have possibly had a hundred of such one – off attacks that you have seen so far. That would have been a great setback to the nation’s economy and, of course, by extension, the state. The committee is doing a great work,” Otuaro said.
In the meantime, the price of oil has gone above $50 a barrel for the first time in 2016 as supply disruptions and increased global demand continue to fuel a recovery.
The benchmark Brent crude price hit $50.07 a barrel in Asian trade.
The rise followed United States data on Thursday showing that oil inventories had fallen, largely due to supply disruptions following fires in Canada, the BBC reports.
Brent crude has now risen 80 per cent since it hit 13-year lows of below $28 a barrel at the start of the year.
U.S crude oil inventories fell by 4.2 million barrels to 537.1 million barrels in the week to May 20, according to U.S Department of Energy data.
Canada is the biggest supplier to the U.S and wildfires in the western provinces have knocked out about a million barrels a day.
Talks in recent months between OPEC and Russia about freezing oil production had already helped prices recover.
Short-term disruptions to oil supplies have also lifted the price, as they have offset higher production from Iran and Saudi Arabia.
As well as the disruption to key oil production facilities in Canada, attacks by militant groups continue to restrict oil pipelines in Nigeria.
Demand has also been better than expected from major economies such as China, India and Russia.
Against this improving backdrop, analysts are starting to modestly raise their forecasts.
Goldman Sachs said earlier this month that it now expected oil prices to consistently hit $50 a barrel in the second half of 2016 and $60 by the end of 2017.
Nation with additional report from Upshot