Foreign Refineries To Stop Buying Nigeria’s Crude Oil As Militants Rebuff Dialogue

NIGER Delta Avengers, NDA, yesterday, scuttled the hope of early resolution of the current spate of bombings in the Niger Delta, as it did not only reject the window created for dialogue by the Federal Government, but also blew up another Chevron Nigeria Limited, CNL, crude oil pipeline in Delta State.
This came on a day indications emerged that Nigeria’s crude oil export may drop further in the days ahead, as major refineries across the globe have concluded plans to stop purchase of crude oil from Nigeria due to rising uncertainties about the country meeting up with deliveries.
The latest attack came as a bombshell to the governors of oil producing states, who met, Tuesday, in Abuja with the Acting President, Professor Yemi Osinbajo, service chiefs and other functionaries on how to end pipeline attacks in the troubled region.
Government had announced a two-week ceasefire on Monday to build confidence in the militants for negotiation.
Militants blow up another Chevron pipeline in Delta
But in a tweet that blatantly negated government’s goodwill, the militant group said yesterday: “This is to inform the general public that we are not negotiating with any committee. If Federal Government is discussing with any group, they’re doing that on their own.
“At 1:00 a.m today (yesterday), the Niger Delta Avengers blew up Well RMP 20 belonging to Chevron, located 20 metres from Dibi flow station in Warri North Local Government Area.”
A source familiar with the location told Vanguard, at about 5.45 a.m., that the affected crude oil pipeline is between Opia and Dagbolo villages in Warri North
Confirming the latest attack, a security source said: “Yes, there was an attack this (yesterday) morning by militants on a Chevron facility.
“The pipeline had earlier been attacked by militants using the same modus operandi, which is with the use of dynamite.
The attack was carried out at about 1:00 a.m.” According to the Chevron staff, who spoke on condition of anonymity, the company will draft a team of technicians to the spot to assess the extent of damage.
A community source, who spoke to Vanguard shortly after a joint team of CNL, soldiers and private security outfit visited the bombed site, said if the plan of the militants had succeeded, the entire Dibi flow station, which had several crude oil and gas components, would have been set ablaze.
At last Tuesday’s meeting in Abuja, the governors allegedly made a compelling case for the Federal Government to cease military operations in the area, which was heating up the polity, and asked it to find a middle ground with the militants, among other things.
Foreign refineries to stop buying Nigeria’s crude oil
The restive situation in the region may lead to a further drop in crude oil export as major refineries across the globe have concluded plans to stop the purchase of the commodity from Nigeria due to rising uncertainties about the country meeting up with deliveries.
This is arising from the fact that a number of oil companies in Nigeria had declared force majeure of crude oil export, while a few others had been forced to suspend or cut production as a result of the bombing of oil facilities across the Niger Delta.
According to data obtained from Reuters, four of Nigeria’s oil grades, including the largest stream, Qua Iboe, have been under force majeure over the last one month.
Force majeure is a legal clause that allows companies to cancel or delay deliveries due to unforeseen circumstances. The report stated that despite the fact that ExxonMobil, which declared force majeure on Qua Iboe in May due to an accident, lifted the declaration last week, the unpredictability is too much for some buyers.
The report further stated that refineries on the United States’ east coast were beginning to turn away from Nigerian crude oil, noting that these same refineries had been on a buying spree for Nigerian crude in recent months that averaged 240,000 barrels per day (bpd) in April and May. As a result, the report said differentials to dated Brent for Qua Iboe, Bonny Light and other grades were under downward pressure, adding that there were several unsold cargoes for June loading.
Accordin to the report, the reduced demand means Nigeria is not benefiting as much as others from a rebound in Brent crude prices at current rate of over $51, which is partly driven by its own oil outages, stating that the reluctance of the refineries to buy Nigeria’s crude oil was limiting the prices Nigeria could get for its oil, even as there was less of it.
Specifically, the report stated that India’s HPCL was forced last month to cancel a vessel it chartered to carry two million barrels of West African crude due to the Qua Iboe force majeure, while India’s state-run Indian Oil Corporation Limited, a major buyer of Nigerian grades over the past year, had stated in its recent tenders that it would not take grades under force majeure, with Qua Iboe remaining off the list of the company.
Indonesia’s Pertamina, another frequent buyer, the report added, had also chosen not to buy Nigerian grades in its recent tenders, favouring Congolese Coco, Angolan Girassol and Saharan Blend from Algeria instead.
The report quoted oil traders as saying that Pertamina had shifted its preferences since the violence and uncertainty escalated, while Senior Vice President of the company, Daniel Purba, said the company was monitoring Nigeria, but noted that the situation was still currently not affecting crude purchasing.
Commenting on the development, one oil trader on the US east coast said: “When you plan your crude run months in advance and commit buying cargo, you need to be comfortable that the cargo will be there when you go to lift.” Similarly, Elizabeth Donnelley, Assistant Head of the Africa Programme at Chatham House, said: “The nature of the recently re-emerged militancy in the Niger Delta suggests it is here to stay for the foreseeable future.”
Also speaking, Olivier Jakob, Managing Director of PetroMatrix in Switzerland, said “not everybody wants to be caught up in that, so they will avoid it. The refineries will walk away from it.”
In a similar development, senior economist at Japan Oil, Gas and Metals National Corp, Takayuki Nogami, lamented, yesterday, that the recent fall in the Japanese oil market was a result of supply disruptions in Nigeria and Canada, following the Niger Delta militant activities. Nogami, in a statement, pointed out that the Japanese economy was on the double at the first quarter and was slow on consumer spending and weak exports which it experienced lately.
According to the statement, a downturn in the US crude inventories was noticed as the company expressed concern over attacks on Nigeria’s oil industry. Stakeholders ask militants to dialogue However, Niger Delta activist, Ann Kio Briggs; Ijaw community leader and Chief Favour Izuokumor advised the militant group to embrace dialogue.
Militants should embrace dialogue , Ann Kio Briggs, who hailed the two-week ceasefire in a chat with Vanguard before Avengers discarded government’s olive branch, said: “Definitely, it is good news in the sense that in the search for some individuals, they have gone into some communities, including their return to Gbaramatu, despite claims that they had earlier pulled out.
“Therefore, if truly the Federal Government is sincere in what it has said and if the military would obey the Federal Government, because that is another thing, then, of course, it is welcome news. “If you look at the whole bulk of the Niger Delta, the people have suffered tremendously and you cannot deny the fact that there are a lot of issues on ground about the injustice that the people of the region have suffered and this injustice must be addressed. “
The only way to address them is to make sure that the injustices are corrected and to do this, the issues of fiscal federalism, ownership and the people being able to develop themselves must be addressed. “If I was the government, the discussion should not be only with the Niger Delta, but should also take this opportunity to reach out to the Middle Belt and other regions who are agitating.” Buhari has shown commitment —Izuokumor Activist and Ijaw community leader, Chief Favour Izuokumor, who also hailed the ceasefire, said it was a bold commitment by President Buhari and urged the militants to take advantage of the window to dialogue. Advising government not to politicize the talks, he stressed the need to invest in the intelligence arm of the nation’s security network to overcome current security challenges facing Nigeria, particularly the resurgence of militancy in the Niger Delta. Izuokumor, spokesperson of Ogbe-ljoh/Warri Kingdom, said: “As the Niger Delta Avengers has failed to toe the line of negotiation, the Federal Government is expected to, without delay, begin to match words with actions by calling all stakeholders and regional leaders to a roundtable to dialogue on some pertinent issues as they affect the Niger Delta people.”
Omare denies sponsoring Avengers
Meanwhile, a former Commissioner for Environment in Delta State, Chief Frank Omare, has denied online report which fingered him of sponsoring the Avengers and communal crisis between his community, Ogbe-Ijoh and Aladja. In a petition to the police, the former commissioner, said: “I wish to state clearly and in unequivocal terms that I do not know any member of Niger Delta Avengers. I am also not one of the sponsors of the Niger Delta Avengers, as I have no reason to do so. “I also did not hold any meeting with members of the Niger Delta Avengers or anybody whatsoever at Ogulaha or any other community on how to attack and wipe out Aladja. “In the past seven years that I have been in the Delta State government, I have used my position to promote peace and harmonious relationship between Ogbe-Ijoh and Aladja. ‘’Former Governors James Ibori, Emmanuel Uduaghan and the present governor, Senator Ifeanyi Okowa, can testify to this fact.”