Nigeria to restart shut-in production within 'few weeks': Daukuro

Caracas (Platts)--31May2006

Nigeria hopes to start bringing back on stream shut-in production and is
confident that all 500,000 b/d of lost output will be restored in the next few
weeks, oil minister Edmund Daukuro said late Tuesday.
"We are able to access the facilities and repair work will start very
soon and by the time the 500,000 b/d comes in the market, we should be close
to 3 million b/d," Daukuro told reporters on arrival in Caracas to attend
Thursday's OPEC meeting. "Currently we are back at the pre-crisis level of
2.4-2.5 million b/d," he said.
Asked when all shut-in production would resume, he said the restarts
would occur in stages. "At least it should be coming in the next couple of
weeks. Literally a couple of weeks and the rest maybe a month or a month and a
half for all of the 500,000 b/d to come back," he said.
Action by militants in the Niger Delta forced Shell, the biggest operator
in the West African oil-producing country, to shut in 545,000 b/d of
production in February this year. The company has so far been unable to access
the installations damaged in a series of attacks by militants seeking a bigger
share of oil revenue, among other demands.
Nigeria has been able to make up for some of the lost production since
then from new offshore fields, Shell's Bonga and ExxonMobil's Erha.
Daukuro said that markets were well supplied with crude oil and high
prices were due to geopolitical tensions and tight downstream capacity.
"We always say the market is well supplied," he said. "You only need to
look at the stocks. We are at five-year highs for stocks so we have to look at
the cause of the tightness on the market. It is a downstream problem,
geopolitical tensions and refining capacity. Basically that is what we are
talking about."
Daukuro said markets were products-driven and he would not speculate on
the possible outcome of the extraordinary meeting in Caracas, which will
determine output policy for the third quarter. "Right now a lot of things are
not rational ... prices are gasoline-driven and the speculative element has to
be addressed," he said.


 

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