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Only 9 Nigeria's oil rigs working —OPEC
By Hector Igbikiowubo
Posted to the Web: Monday, August 21, 2006



LAGOS—A RECENT survey by the Organisation of Petroleum Exporting Countries (OPEC) showed that only nine rigs were operational in Nigeria as at last month, a far cry from what obtains in other member nations of the organisation and an indication that the country’s oil and gas exploration and production may not be competitive after-all.

The recent survey showed that Nigeria’s African neighbour and member of OPEC, Algeria, had 27 rigs in operation last month, Indonesia had 45, Iran 46, Kuwait 13, Libya 10, Qatar 10, Saudi Arabia 63, UAE 16 and Venezuela 88, while no data was available for Iraq.
Altogether, 327 rigs were operational in OPEC member countries, with implications for sustained and increased crude oil exploration and production.
Although the organisation said total rig count might not add up due to independent rounding, enquiries at the Department of Petroleum Resources showed that the survey might not be far from the true position.

An official of the department who pleaded anonymity said several rigs had left the area because of the problems in the Niger Delta where a little under one million barrels of crude oil remains shut in due to the activities of militants.

At the last count, Shell Petroleum Development Company (SPDC) had 462,000 barrels per day shut in, down from 635,000 barrels per day. A statement from the company said 173,000 barrels per day production was restored last week.
Chevron Nigeria Limited (CNL) still has over 120,000 barrels per day shut in due to community and youth militants related activities.
Shut in output for Total Upstream Companies is said to be between 180,000 and 200,000 barrels per day, while that of the Nigeria Agip Oil Company is put at about 80,000 barrels per day.

Daukoru on output

Speaking on the amount of shut in output, Dr. Edmund Daukoru, Minister of State for Petroleum and OPEC President, said the affected output was as a result of pre-emptive action by the multinationals. He said as soon as the security of lives of the personnel of the multinationals was guaranteed, they would return to their locations and that production would be restored. However, he did n ot put a time frame.

Investigation revealed that OPEC crude production fell by 260,000 b/d to 29.69 million b/d in July from 29.95 million b/d in June as new closures in the Niger Delta cut Nigeria’s output and Iraq was forced to stop exporting crude from Turkey.

OPEC’s July output was also impacted by a drop in Venezuelan production after one of the country’s heavy crude upgraders was shut down for maintenance during the period under review.

The 11- member organisation, excluding Iraq, pumped an average 27.62 million b/d in July, down 210,000 b/d from June’s 27.83 million b/d, and under-producing their notional 28 million b/d output ceiling by 38,000 b/d.

Production shortfall

Production shortfall totaling 380,000 b/d from Indonesia, Iraq, Nigeria and Venezuela was partly offset by 120,000 b/d of increased production from Iran, Libya and the UAE.
The losses from Nigeria — where rising deepwater output is only partly offsetting the volume of production shut in as a result of deliberate attacks on oil installations and accidents — and Venezuela alone amounted to 300,000 b/d.

The organisation has also lowered its estimate for world oil demand in 2006 due to slowing economic growth, the cartel said in a report, weekend. It said demand was now expected to grow by 1.3 million barrels per day (bpd) to average 84.5 million bpd, a downward revision of 80,000 bpd from last month’s figure. This was due to “an unexpected decline in OECD consumption in the second quarter of this year.” The OECD zone comprises 30 leading economies, including the US, Japan and Western Europe.

The previous forecast estimated demand for OPEC crude in 2006 to average 29.1 million b/d, representing an upward revision of 0.2 mb/d versus the previous month.
In 2007, the estimated demand for OPEC crude is expected to average 28.3 mb/d, representing a decline of 0.8 mb/d versus 2006. On a quarterly basis, the forecast shows that demand for OPEC crude is expected at 29.3 mb/d in the first, 27.2 mb/d in the second, 28.1 mb/d in the third and 28.7 mb/d in the fourth quarter.
http://www.vanguardngr.com/articles/2002/cover/august06/21082006/f321082006.html