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Nigeria Has 900,000 Barrels a Day of Crude Oil Halted (Update1)

By Julie Ziegler

Dec. 6 (Bloomberg) -- Nigeria, Africa's biggest oil producer, has halted about 900,000 barrels a day of crude output as a result of unrest in the Niger Delta and oilfield closures, the nation's minister of state for petroleum said.

The figure includes about 500,000 barrels a day shut in by militant attacks in the Niger Delta and another 400,000 barrels a day halted by ``technical disruptions,'' H. Odein Ajumogobia said today by telephone, without saying when the cuts began.

``This total represents potential production that could be brought back on quite rapidly,'' Ajumogobia said, without providing further details.

The Movement for the Emancipation of the Niger Delta, or MEND, has attacked oil installations in the region since the beginning of 2006 in a bid to cripple Africa's biggest industry.

Current output is about 2.1 million barrels a day, Ajumogobia told reporters yesterday in Abu Dhabi during a meeting of the Organization of Petroleum Exporting Countries, of which Nigeria is a member. That figure, combined with the halted output, would bring Nigeria's production capacity to about 3 million barrels a day.

Nigeria has ``an issue with OPEC over quotas when they think ahead,'' said Antony Goldman, a London-based independent analyst specializing in Nigeria. The country ``probably does have an interest in telling the market that it has a 3 million-barrel-a- day capacity.''

Output Target

Nigeria plans to increase oil production to 4 million barrels a day by 2010. Such a goal may be at odds with the limits imposed by its OPEC membership, according to a Nov. 14 report from HSBC Bank Plc.

The country has an OPEC quota of 2.16 million barrels a day. The producer group, whose 13 members supply more than 40 percent of the world's oil, sets output limits aimed at keeping the market stable.

Goldman also questioned whether oil halted by ``technical disruptions'' came from deep-water or onshore joint-venture production, where the government receives a larger cut of the profits. Joint-venture agreements between oil companies and Nigeria entitle the federal government to all revenue in excess of $30 a barrel.

``Would they shut down deep-water to bring joint ventures back on stream?'' Goldman said.

Under current quotas, the government wouldn't be able to produce all of the crude that Ajumogobia said is halted.

To contact the reporter on this story: Julie Ziegler in Lagos at jziegler@bloomberg.net.

Last Updated: December 6, 2007 12:06 EST

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