Nigeria’s Oil Output Cut 500,000 Barrels by Flood, Agency Says

Nigeria, Africa’s top crude producer, lost as much as 500,000 barrels a day of output during two months of flooding that deluged oil fields in the Niger River delta and is now restarting some of the platforms.

Production dropped to 2.1 million barrel a day from 2.6 million at the height of the floods “in the last couple of weeks,” Osten Olorunsola, head of the Department for Petroleum Resources, the oil industry’s regulator, said in Lagos, the commercial capital. Output is gradually being restored to 2.3 million barrels as the water recedes and producers reopen wells and other affected facilities, he said.

“A lot of oil firms were hit; actually some companies were completely out,” Olorunsola said yesterday. “Even the big players got seriously hit. Total SA (FP) was completely out in Oil Mining Lease 58, which produces 90,000 barrels. Agip was seriously hit at Obiafo, Mbede and Oguta fields.”

Nigeria is facing its worst flooding in decades after its two biggest rivers, the Niger and the Benue, overflowed their banks as dams let out water following a year of heavy rains. Farms, homes and roads have been washed away and at least 148 people killed by the floods, according to the country’s emergency agency. The nation depends on oil exports for more than 80 percent of its revenue.

Total confirmed that production at OML 58 has been halted. The company also declared force majeure, a legal clause that allows it to miss scheduled shipments because of circumstances beyond its control, on natural gas deliveries from the field to Nigeria LNG, Anastasia Zhivulina, a company spokeswoman in Paris, said today by e-mail.

Shell on Oct. 22 declared force majeure on exports of its Bonny Light and Forcados crudes citing damage to its pipeline by oil thieves and production deferment from a third-party producer because of flooding.

At least 90 percent of the country’s crude is pumped by Royal Dutch Shell Plc (RDSA), Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), Total and Eni SpA (ENI), via its Agip unit, in joint ventures with the state-owned Nigerian National Petroleum Corp.

To contact the reporters on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net;

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.