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Nigerian oil output to slump further as Forcados gets shut-in: market sources

Increase font size  Decrease font size Date:2016-11-22   Views:656
Nigeria's hopes of ramping up its oil output this year have been diminished, as renewed attacks on oil infrastructure in the Niger Delta have shut in production of popular export grade Forcados in the past week, market sources said Friday.

Nigerian oil output had recovered sharply in the past few months on the return of Qua Iboe, Forcados and Bonny Light as militant attacks were slowing down.

October output, including condensate grade Akpo, rose to around 1.84 million b/d, according to S&P Global Platts estimates. But with Forcados -- which averaged in the range 150,000-200,000 b/d the previous month -- now out, production for the rest of the year will again plummet.

Nigerian production is also due to be hit by maintenance at the offshore Agbami field in the first half of December, cutting output by a further 125,000 b/d.

Forcados output has been down since last week after an oil spill caused by an attack on the Trans-Forcados pipeline impacted transportation of the grade.

On November 2, the Trans-Forcados pipeline was bombed barely hours after Nigerian President Muhammadu Buhari met with senior Niger Delta leaders to end the militancy, outlining the fragility of a possible peace deal.

FORCADOS OIL SPILL

Sources told Platts that Forcados production had been affected more than initially expected, and with no signs of a December and January loading program, exports of the grade are likely to be out until early next year.

"[The situation] in Forcados is not looking good at the moment -- [we're] trying to get some clarity," a trading source said.

Sources said the incident caused an oil spill which damaged the pipeline, and with exports of this grade also facing loading and operational delays, production has been suspended.

One source also said the oil spill came about from the explosion that occurred on the Trans-Forcados pipeline while engineers were trying to fix the facility previously attacked by militants.

The spill was hindering repair works and was seen as one of the reasons why market participants were doubtful that more loading programs would be issued.

A Shell spokeswoman declined to comment on the oil spill but confirmed that Forcados was still under force majeure.

Loadings of Forcados briefly resumed in early October for the first time in eight months but barely a month late the grade is again offline.

Loadings of Forcados were suspended in early-February after the export pipeline feeding into the Forcados oil terminal was bombed by the militant group Niger Delta Avengers.

Nigerian oil output plummeted to near 30-year lows of around 1.3 million-1.4 million b/d in May from 2.2 million b/d earlier this year as attacks on oil facilities in the Niger Delta rose at an alarming pace due to resurgent militancy.
 
 
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