Following almost two years of declining exports due to militant activities, industry insiders yesterday said Nigeria’s crude oil output would increase by 500,000 barrels per day in 2008.
Reports showed that workers are slowly returning to the forcados and EA oil fields which were closed by attacks, while Shell has already restored about 65,000 bpd of the 477,000 bpd output lost in the western Niger Delta, implying that the country hopes to see another 270,000 bpd from Forcados and EA.
“Although, the increase would depend on whether the environment is stable and if the Agbami field starts up as scheduled,” reports said.
Chevron’s Agbami FPSO hull, a new offshore oilfield, with processing capability of 250,000 barrels per day of oil and storage capacity of 2.15 million barrels of oil, is expected to begin production in June, 2008.
According to monthly Organisation of Petroleum Exporting Countries (OPEC) output survey, Nigeria pumped a total of 2.16 million bpd in September, down from 2.46 million bpd at the end of 2005, before the latest phase of disruption began. If things go as planned, crude supply could reach 2.66 million bpd by the start of the third quarter.
In the draft budget for 2008, government used an average oil production of 2.44 million bpd for the year. The recovery, reports said, should provide a windfall for the treasury, but will also present a challenge to OPEC, which has set a 2.16 million bpd supply limit for Nigeria from November, and Western companies producing Nigerian oil will face much tougher restrictions if government decides to comply with its quota.
Another downside risk for production would be any government enforcement of a January 2008 deadline to eliminate gas-flaring.
Oct52007