Title: Crude oil disruptions in Nigeria increase as a result of militant attacks - Today in Energy - U.S. Energy Information Administration (EIA)
Headings: Crude oil disruptions in Nigeria increase as a result of militant attacks
Crude oil disruptions in Nigeria increase as a result of militant attacks
Content: By May 2016, Nigerian oil production had fallen to 1.4 million b/d, nearly a 30-year low. After some repairs, and in the absence of major new attacks, some of the disrupted production was restored, and crude oil output averaged 1.6 million b/d in June. Despite this recent increase, the continued threat of militant attacks poses a risk to sustained production. The NDA has claimed responsibility for several attacks since the beginning of July, and outages once again rose in July. According to trade press reports, exports of multiple Nigerian crude oil grades, including Bonny Light, Forcados, Brass River, and Qua Iboe, have been under periods of force majeure since the beginning of 2016, meaning companies are released from export obligations as a result of circumstances beyond their control. Significant disruptions in oil production resulting from NDA attacks, combined with relatively low crude oil prices, have had a significant effect on Nigeria's economy. According to Nigeria's Ministry of Budget and National Planning, Nigeria's oil sector provides 70% of government revenue and 95% of export revenue. The NDA attacks are largely in response to President Buhari's cutback on amnesty payments and termination of security contracts to former militants. The group threatens to continue the attacks until the Nigerian government meets its demands, some of which include greater regional control of local oil production, continuation of the amnesty program, and compensation to Niger Deltan communities polluted by oil exploration and production. The Nigerian government announced in June that it had agreed to a ceasefire with the NDA, but the group refutes that statement and has conducted numerous attacks since then.