Shaky Nigeria loses top oil-production ranking in Africa

May 2, 2016
Nigeria's loss to Angola of top position among African oil producers reflects more than geology.

Nigeria's loss to Angola of top position among African oil producers reflects more than geology.

Always unstable, Nigeria looks especially shaky now.

Its crude output, according to the International Energy Agency's April Monthly Oil Report, averaged 1.7 million b/d in March, down 60,000 b/d from February. It was the lowest monthly average since July 2009.

Angolan production in March increased by 40,000 b/d to 1.8 million b/d.

Nigeria's production suffered from pipeline sabotage Feb. 13 at Forcados Crude Oil Terminal. A militant group that calls itself Niger Delta Avengers claimed responsibility.

Pipeline vandalism is nothing new in the Niger Delta. When theft from onshore pipelines averages 25,000 b/d, officials call it a good month.

But the Forcados attack was subsea and described as sophisticated, designed to impede repair. Restoration of flow isn't expected before May.

In response to the attack, major producing companies declared force majeure. Flow through the damaged line had been expected to be 250,000 b/d.

The disruption comes at an especially difficult time for Nigeria. The crude-price slump has strained the government's weak finances and aggravated disputes over oil available to production-sharing contractors for cost recovery.

The government is fighting the Boko Haram insurgency in the northeast, sometimes-bloody conflicts between farmers and migrant herdsmen in the center of the country, and resurgent militancy in the Niger Delta, near the region once known as Biafra where a secessionist movement is festering.

Nigeria is inherently fractious, divided between the Muslim north and Christian south but subdivided into myriad other tribal and cultural units.

Even if there were no violence, governing the country would be difficult. But a legacy of corruption and economic dependence on a sharply devalued commodity make the task daunting.

Now, a plan by President (and former dictator) Muhammadu Buhari to treat Niger Delta oil vandals as terrorists threatens to provoke a backlash.

The oil market, of course, needs less supply. But violent destabilization of producing countries is the worst way for production cuts to happen.

About the Author

Bob Tippee | Editor

Bob Tippee has been chief editor of Oil & Gas Journal since January 1999 and a member of the Journal staff since October 1977. Before joining the magazine, he worked as a reporter at the Tulsa World and served for four years as an officer in the US Air Force. A native of St. Louis, he holds a degree in journalism from the University of Tulsa.