Pipeline Explosions Threaten Oil Production

Nigeria’s oil production output may fall this month over a fresh pipeline explosion.

A fresh explosion was said to have rocked a major export pipeline in the Niger Delta, with about 12 deaths reported on Thursday at Rumuekpe community in the Emuoha Local Government Area of Rivers State.

The explosion occurred at a major export pipeline, the 180, 000 barrels per day Trans Niger Pipeline that passes through the Rumuekpe community.

TNP pipeline, Nigeria’s major liquid hydrocarbon delivery channel, was under force majeure for the better part of last year. Apart from transporting crude to the Bonny Export Terminal, the TNP is also part of the gas liquids evacuation infrastructure which is critical for continued domestic power generation and liquefied gas exports.

Nigeria’s crude oil production has begun to recover, having increased by 100, 000 barrels per day last month, according to data obtained from Reuters’ secondary sources survey.

An increase by 100, 000 barrels per day in February, amounted to a rise of 2.8 million barrels in the month. The survey puts Nigeria’s oil output for last month at 1.3 million barrels per day, amounting to output of about 36,400 million for the month. Nigeria’s crude grade, Bonny Light, was sold for $84 per barrel in February, translating to a total earnings of about N1.408tn in the month.

However with the fresh development, Nigeria risks losing export of 180, 000 barrels per day this month, which could amount to losing over four million barrels of export if the pipeline is not quickly repaired.

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