NNPC could be crippled by militancy

September 5, 2016 5:50 AM

Niger Delta Avengers, which claimed responsibility for most of the attacks, said last month it had ceased hostilities

Niger Delta Avengers

Militant attacks on energy facilities in Nigeria's southern Niger Delta threaten to cripple the country's state oil company if allowed to go unchecked, it said on Sunday.

Militants calling for a greater share of the country's oil wealth to go the impoverished region have reduced Nigeria's crude oil output by 700,000 barrels per day (bpd) to 1.56 million bpd since the start of the year.

Niger Delta Avengers, which claimed responsibility for most of the attacks, said last month it had ceased hostilities to pursue talks with the government, but others say they will continue attacks. Another group, the Niger Delta Greenland Justice Mandate, attacked a state oil company pipeline on Tuesday.

"If the current situation remains unchecked, it could lead to the crippling of the corporation and the nation's oil and gas sector, the mainstay of the Nigerian economy," the Nigerian National Petroleum Corporation (NNPC) said in a statement.

Crude oil sales account for 70 percent of government revenues in Nigeria and the country, which has Africa's biggest economy, has slipped into recession for the first time in more than 20 years as a result of low crude prices.

The statement was issued by NNPC following a meeting on Saturday held by Maikanti Kacalla Baru, group managing director, and a number of his predecessors including the oil minister, Emmanuel Ibe Kachikwu, whom he replaced in July.

"Insecurity is threatening production and damaging the Niger Delta environment. There is the urgent need for government and security agencies to refocus as well as engage the various host communities," said the statement.

The attacks have meant that the government has struggled to fund its budget, which assumes oil production of 2.2 million bpd, hampering the implementation of plans aimed at boosting the flagging economy.