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Nigerian oil output down 40% on Delta pipeline attacks

Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria’s oil production has fallen by almost 40 percent to 1.4 million barrels a day due to militant attacks on facilities in the Delta region, its oil minister said on Monday.

Emmanuel Ibe Kachikwu’s comments come amid a resurgence of militancy in the southern region which produces most of the crude oil that Nigeria relies on for around 70 percent of national income, and days after Britain’s foreign minister said local grievances need to be addressed. [nL5N18B0L2]

Kachikwu said efforts would be made to engage with people in the area.

Nigerian oil output has been driven lower after attacks by a group calling itself the Niger Delta Avengers which says it wants a greater share of oil profits and independence for the swampy region where residents have long complained of poverty.

Attacks in the last few weeks have hit platforms belonging to Chevron and Shell.

“Because of the incessant attacks and disruption of production in the Niger Delta, as I talk to you now, we are now producing about 1.4 million barrels per day,” Kachikwu told the House of Representatives.

“We were at 2.2 million bpd but we have lost 800,000 barrels,” said Kachikwu, who was invited to address the lower house of parliament about the country’s oil sector.

The 2016 budget assumes oil production of 2.2 million barrels per day at $38 a barrel.

Nigeria has moved in army reinforcements to hunt the militants but British Foreign Minister Philip Hammond on Saturday said the government needed to the deal with the root causes of the conflict because a military confrontation could end in “disaster”.

Kachikwu echoed these sentiments when he told parliamentarians experience had shown that force alone tends not to solve problems.

“There are going to be robust engagements on what could have happened to the contract or relationship that used to exist between the Niger Delta and the Nigerian police that has suddenly resorted to sabotage,” said Kachikwu.

President Muhammadu Buhari has extended a multi-million dollar amnesty signed with militants in 2009 but upset them by ending generous pipeline protection contracts.

“We are trying to look at the amnesty and what has happened. Policing is key, security is key and throwing economic palliative to those sectors are also key,” added Kachikwu.

He said the government was “trying to create funding mechanisms for some private investments including funding mechanisms for some modular refineries” and “actually getting them involved in the security of the facilities”.


(By Camillus Eboh. Writing by Ulf Laessing and Alexis Akwagyiram; editing by Adrian Croft and David Evans)

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Shell says theft from its Nigerian oil pipeline network fell in 2015

Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – Theft of crude oil from the pipeline network of Shell’s Nigerian subsidiary fell to 25,000 barrels per day (bpd) in 2015, the company said on Monday, roughly 32 percent less than the previous year.

The number of sabotage-related spills on the SPDC network also declined to 93 in 2015, compared with 139 the previous year, Shell said in its annual sustainability report.

It attributed the decrease to divestments in the Niger Delta and increased surveillance and security by the Nigerian government, but said theft and sabotage were still responsible for around 85 percent of spills from SPDC operations.

President Muhammadu Buhari has said theft siphons as much as 250,000 bpd of crude of its roughly 2 million bpd of production and last week promised to crack down on groups responsible for pipeline attacks.

Still, the issue has continued to plague the country. Shell currently has a force majeure in place on Forcados crude oil exports following an attack on a subsea pipeline in February, while Italian oil major ENI reportedly declared force majeure on Brass River exports late last week.


(Reporting by Libby George and Karolin Schaps; Editing by Mark Potter)

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Algeria’s Sonatrach awards $100 mil pipe deal to foreign firms

Comments (0) Business, Latest Updates from Reuters, Middle East

ALGIERS (Reuters) – Algeria’s state energy firm Sonatrach has awarded a $100 million contract to supply oil and gas drilling tubes to five foreign firms as part of its drive to increase production, a document seen by Reuters on Tuesday showed.

The companies named in the Sonatrach document are Germany’s CCC Machinery, Dutch firm Van Leeuwen, Vallourec Tubes France, Kurvers Piping France, and High Sealed&Coupled from China.

OPEC member Algeria, which has been hurt by a 70 percent fall in oil prices since mid-2014, is campaigning for more foreign investment to increase oil and gas production to sustain exports and meet growing local demand.

But recent bidding rounds have failed to attract much interest from foreign oil producers.

Sonatrach also said on Tuesday it had made a new oil find with Thailand’s PTTEP and China’s CNOOC following successful drilling in the Hassi Bir Rekaiz area in Algeria.

“This represents 20,000 barrels per day,” a Sonatrach source told Reuters.

Sonatrach holds a 51 percent stake in the project, with the other two companies owning 24.5 percent each.

The state energy company is focusing on developing areas around existing fields and hiking production at its mature fields. It will also invest $3.2 billion over four years to increase pipeline capacity as natural gas output rises from new and existing fields.


(By Lamine Chikhi. Editing by Patrick Markey and Susan Thomas)

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Kenya and Uganda presidents to meet oil companies over crude pipeline

Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Kenya and Uganda’s presidents and oil company executives will meet on Monday to hold further discussions on a route for a pipeline to transport the two countries’ oil, the Kenyan president’s spokesman said on Sunday.

Resolving the pipeline route is crucial to helping oil companies involved in Uganda and Kenya to make final investment decisions on developing oil fields.

“President Uhuru Kenyatta will host Ugandan President Yoweri Museveni tomorrow … They will discuss the construction of the Uganda-Kenya oil pipeline, a key plank of the Northern Corridor Infrastructure Projects,” Manoah Esipisu said in a statement.

Last wee, Tanzania’s presidency said that Total, which has a stake in Uganda’s crude oil discoveries, had set aside $4 billion to build a pipeline from Ugandan fields to the Tanzanian coast and that Tanzania wants the three-year construction schedule shortened.

The comments raised the stakes in a competition to secure the pipeline with Kenya, which wants Ugandan oil to be exported across its territory and wants the pipeline to link up with Kenyan oil fields.

“Kenya favours the northern route through Lokichar, because as part of the Lamu Port, South Sudan, Ethiopia Transport (LAPSSET) project, it would transform infrastructure and the way of life of the people in the towns and counties across its path,” Esipisu said.

He added that officials from Tullow Oil, Total and China’s CNOOC had been invited to the meeting.

Total has previously raised security concerns about the Kenyan route. Sections of the Kenyan pipeline could run near Somalia, from where militants have launched attacks on Kenya.

But industry officials have also said that connecting Kenyan fields, which have estimated total recoverable reserves of 600 million barrels, with those in Uganda would make the pipeline project cheaper because costs would be shared.

Both Kenya and Uganda, which the government says has a total 6 billion barrels of crude, have yet to begin commercial production.

Tullow Oil and partner Africa Oil first struck oil in Lokichar in northwest Kenya in 2012.

Africa Oil and Tullow were 50-50 partners in blocks 10 BB and 13T, where the discoveries were made. Africa Oil has since sold a 25 percent stake in those blocks to A.P. Moller-Maersk.


(Reporting by George Obulutsa; Editing by David Goodman)

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Algeria’s Sonatrach to invest $3.2 bil in pipelines

Comments (0) Business, Latest Updates from Reuters, Middle East

SIDI REZINE, Algeria (Reuters) – Algerian energy company Sonatrach will invest $3.2 billion over four years to increase pipeline capacity as natural gas output rises from new and existing fields, a top company official said on Tuesday.

OPEC member Algeria has been hurt by a 70-percent fall in oil prices since mid-2014. Its revenue from energy fell by half last year, forcing the government trim spending and freeze some infrastructure projects.

But the government, despite struggling to attract foreign oil companies in recent energy bidding rounds, is determined to increase oil and gas production to keep up exports and meet growing local demand.

“Sonatrach will invest $3.2 billion from 2016 to 2020 to boost its transport capacity, including $530 million in 2016,” Arbi Bey Slimane, Sonatrach’s vice president for pipeline transportation, told Reuters at the company’s Sidi Rezine office east of Algiers.

He said the company wanted to guarantee increased supplies to European clients. The additional transport capacity aims to deliver more volume as new fields in southeast and southwest add production soon. He did not give specifics on amounts or timing.

Algeria produces 1.1 million barrels per day of oil, and 27.44 billion cubic metres of gas, according to official figures.

Sonatrach’s CEO Amin Mazouzi has pledged a “sizeable increase in production” in 2016 as Algeria looks to end more than a decade of stagnation in energy production.

“We will build 1,650 km of pipeline, and six compression and pumping stations by 2020. Our goal is to transport output from new fields located in the south east and south west,” Slimane said.

Algeria is in talks with the European Union as the EU looks to diversify its energy sourcing away from Russia, which supplies around 30 percent of the EU’s gas.

Slimane said Algeria would remain a stable gas supplier for southern Europe.

“The volume exported in 2015 increased by 2 million tonnes equivalent oil (TEP) to reach 99 million TEP. The 2 million were delivered to southern Europe,” he said.


(By Lamine Chikhi. Editing by Patrick Markey and Jason Neely)

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