Nigeria was confronted with the prospect of double jeopardy, Monday, when Anglo-Dutch oil multinational, Shell, confirmed that suspected militants believed to be from the Niger Delta attacked its Trans Ramos Pipeline (TRP) in Delta State on Saturday night.
This came as concerns mounted over oil prices, as United States crude tumbled, Monday below $40 per barrel for the first time since April, with both Brent and US crude prices falling by nearly four per cent.
The latest slump in oil prices followed heightened fears of an oil glut after a survey suggested that crude oil output from the Organisation of Petroleum Exporting Countries (OPEC) reached record highs in July.
It was also certain to raise concerns among managers of the Nigerian economy who had predicated the 2016 budget on oil benchmark price of $38 per barrel.
Already, revenue for the first half of the year in Nigeria had come in at about half the government’s projections in the 2016 budget. The shortfall suggests that government’s plan to boost the economy through increased spending on infrastructure will struggle to take off this year.
Although no group has claimed responsibility for the attack on the Shell facility, which happened near Odimodi, a company spokesman, Mr. Precious Okolobo, yesterday said the pipeline had been shutdown for repairs since February when the Niger Delta Avengers bombed the 48-inch subsea Trans Forcados pipeline.
The attack on the pipeline on Saturday night was erroneously reported as pipeline operated by the Nigerian Petroleum Development Company (NPDC), Monday.
It was gathered that the Trans Ramos Pipeline transports crude oil from Shell’s southern swamp area to the Forcados export terminal.
A community leader Godspower Gbenekama also said residents heard a loud explosion, adding that there had been an oil spill.
But Okolobo said in a statement monday that Shell was “investigating the reported incident”.
“The Trans Ramos Pipeline (TRP) transports oil to the Forcados terminal and has been shut since the leak on the Forcados export line on February 14, 2016. We are investigating the reported incident on the TRP,” Okolobo explained.
In the international market, US crude tumbled yesterday below $40 per barrel for the first time since April as the prices of both West Texas Intermediate (WTI) and Brent fell nearly 4 percent.
WTI crude plumbed $39.86, its lowest since April 20, trading $1.51, or 3.6 percent, lower at $40.09.
Brent crude was down $1.43, or 3.3 percent, at $42.10 a barrel, after a session low at $41.87.
A survey by Reuters on Friday found that output from the OPEC likely rose in July to its highest in recent history as Iraq pumped more and Nigeria squeezed out additional crude exports despite militant attacks on oil installations.
Data on Friday also showed the United States added 44 new oil drilling rigs in July, the most for a month in two years, intensifying concerns that global production could once again get to unmanageable levels like it did in 2014-2015.
source: This Day
