Nairametrics| Figures released earlier this week showed that crude oil production dropped to 1.6 million barrels per day (bpd) in March 2017. The news could be a source of concern in certain quarters due to its impact on the economy and government activities.
For example the figure represents a shortfall of about 600,000 bpd or $38.1 million daily for the country’s oil exports. Given that the budget reserves propelling the Central Bank of Nigeria’s (CBN) forex policy are majorly supported by revenue from oil exports, Nigerians may start to panic.
However, a closer look at the situation will reveal that there really may not be cause for panic. The reasons for the shortfall are unlike previous months where the Niger Delta militancy had led to bombing of oil wells and pipelines. Rather, the loss stemmed majorly from maintenance exercise of key facilities by oil companies.
In March alone, routine repair work going on at Shell Nigeria Exploration and Production Company Limited, SNEPCo’s 250,000 bpd capacity Bonga Floating Production Storage and Offloading (FPSO). This maintenance is already completed and the facility is back in use already.
According to the Managing Director of SNEPCO, Bayo Ojulari, such activities cannot be termed as losses as they had been scheduled for years.
“The plan is to successfully conclude the ramp of activities and resume production as planned in April, 2017. It is not proper to interpret the period as production loss to Nigeria. Rather, the turnaround maintenance is a series of planned and controlled activities that are implemented in collaboration with government and other stakeholders with the aim of ensuring the continued safety and productivity at the facility. The planning started two years ago and safety is top priority in every stage of the activities.” Guardian quotes Ojulari as saying.
While unlikely to meet the 2.2 million bpd benchmark set in the budget, with the resumption of activities at the Bonga FPSO, oil production figures for April is expected to rise and the FG should be able to continue its activities.