Italian oil major, Eni, yesterday declared force majeure on 21,000 barrels per day Brass River crude oil stream, translating to revenue losses by Nigeria and other equity stakeholders valued at N411.6 million ($2.058 million) in two days.
A spokesperson for Eni said in a mail that the Brass facility was shut down after a Sunday evening attack, which is the second in one week and 14th this year on major facilities of Eni’s subsidiary in Nigeria, Nigeria Agip Oil Company (NAOC).
About 21,000 barrels per day (bpd) in total of the stream’s production were, according to the spokesperson, impacted by the blast, but just 4,200 bpd from Eni’s equity stake were out.
This, he added, amounted to roughly 20 per cent of the crude stream’s typical production, but is yet another blow to Nigeria’s oil exports, which have been hobbled by militant attacks over the past month.
At $49 per barrel price of oil yesterday, the loss recorded from the 21, 000 barrels Brass oil shut down accumulated to $1.029 (N205.8 million) each on Monday and Tuesday (yesterday).
This, a data showed, represented $2.058 million (N411.6 million) losses in two days. Out of the total losses, Eni lost N82.32 million ($411, 600) in those two days.
With 4,200 barrels share of equity crude on the installation at $49 per barrel, the company is losing about N41.16 million ($205, 800) daily.
This amounted to N82.32 ($411,600) on Monday and Tuesday, the two days the installation is expected to remain shut.
Meanwhile, oil price slump has dragged discoveries to lowest level in 60 years. Just 12.1 billion barrels of reserves were added last year, threatening future production levels, according to a new data released yesterday.
Oil and gas discoveries are at their lowest level since 1952. This adds further evidence of the damage wrought by the oil price crash since the summer of 2014.
Morgan Stanley, quoting data from consultant, Rystad Energy, said that discoveries outside the United States had come in at 2.8 billion barrels last year.
This increased to 12.1 billion when the US is included, mainly due to the huge resources being unlocked by the disruptive shale oil sector.
However, this total remains the lowest since 1952, the bank added. At that time, says Reuters, “the oil industry was oneseventh of its current size.” The comparison is stark and the consequences are significant.
Morgan Stanley reckons that “even under the most modest demand forecasts, driven by a drive to limit global warming to two degrees Celsius, where consumption will decline to around 86 million barrels per day in 2030, only around twothirds of the demand can be met” on current trends.
If production begins to fall well short of demand, it could lead to a spike in prices in the decades to come.
This would mark a complete turnaround from the current situation, where excess supply is suppressing oil prices around the world and looks set to do so for some time.