ExxonMobil: blockade threatens Nigeria’s oil production

 

Oil giant ExxonMobil has decried the blockade mounted by its former employees around its facilities in Nigeria.

The oil firm said the activity threatens crude production and such “disruptions to these operations have the potential to significantly impact revenues.”

It said the blockade was characterised by playing of loud music, defacing of company facilities and intimidation of personnel,  adding that  the “continued denial of access to production facilities could impact the company’s ability to safely continue production operations.”

This is coming after a six-week blockade by former workers at the oil facilities.

In July, the Lagos headquarters of ExxonMobil was shut down by the company’s workers’ unions over the alleged dismissal of 860 security personnel without entitlement. The workers besieged the office of the oil company, protesting the sacking of workers, mainly Nigerians. The protesters accused the company of sacking the workers most of whom had worked with the company for over 22 years without regards for the rule of law

Mobil Producing Nigeria, the ExxonMobil subsidiary that released the statement, produces over 550,000 barrels per day of crude oil, condensates and natural gas liquids.

According to the National Bureau of Statistics (NBS), Nigeria’s average production in the second quarter of 2018 was 1.8 million barrels per day. Officials at the oil company feared the blockade may affect the nation, which relies heavily on oil revenue.

Output from the Organisation of Petroleum Exporting Countries (OPEC’s) second-biggest producer has jumped to a record and is set to expand further, reflecting higher investment in the country’s southern fields following crude’s rally.

“Iraq has oil that’s cheap and relatively easy to produce,” Mustafa Ansari, a senior economist at Arab Petroleum Investments Corp., said in an interview in Muscat, Oman. Increased output from the south has more than compensated for a halt in production from the shuttered Kirkuk field in the north, he said.

The country pumped 4.64 million barrels a day in August, beating the previous high set two years ago, while exports matched peak levels from 2016, according to a Bloomberg survey and tanker-tracking data.

Oil has averaged more than $70 a barrel this year after the OPEC countries and its allies curtailed output to eliminate a global glut. But with supply threats on the rise from Iran to Venezuela, there’s mounting concern that the group’s spare capacity now won’t be sufficient be absorb any major supply shocks.

Buyers have already begun shunning Iranian barrels as the market prepares for the onset of fresh U.S. sanctions in November. Iranian oil exports fell 14 percent in August, according to tanker-tracking data compiled by Bloomberg.

“It remains unclear whether OPEC will be able to absorb a potentially massive fall in Iranian oil exports due to the U.S. sanctions,” Commerzbank AG said in a note.

The same day, Nigeria Oil Minister Emmanuel Ibe Kachikwu sought to reassure, saying Saudi Arabia and the United Arab Emirates, along with Nigeria and Angola, can bring enough oil to the market to help meet shortfalls from Iran.

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