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Nigeria’s Oil And Gas Exports At Risk Due To Severe Flooding

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Nigeria’s oil and gas exports are at risk of declaring force majeure following the high rate of flooding in some states like Rivers, Delta and Bayelsa states in the Niger Delta region. According to reports, majority of the communities in the Niger Delta which is the country’s major oil producing region are currently flooded, which could put oil and gas facilities at serious risk of having to halt production.

This could have a detrimental effect on Nigeria’s crude oil exports, which have been hampered by allegations of oil theft. A reduction in Nigeria’s export revenues will have a significant impact on government revenues and might make the nation’s financial problems worse.

Sources are saying that service companies that usually come to service equipment on onshore oil and gas production sites no longer have access into the state largely due to the fact that roads leading from Delta state and Rivers state are currently cut off due to flooding.

“It is a ripple effect because if service companies are not able to reach onshore sites to maintain equipment, the equipment could develop faults and if that happens, work will be stalled as production cannot take place.”

According to unconfirmed reports obtained by Nairametrics, some oil and gas companies have already started evacuating staff members from certain production sites in Imo and Bayelsa States.

In the Omoku local government area of Rivers state, the Ogba/Egbema/Ndoni communities are currently flooded and have also recorded destruction of properties.

Companies like Shell Petroleum Development Company, Nigerian Agip Oil Company, and TotalEnergies have facilities in Omoku, putting those facilities under danger from floods in the area.

According to President Buhari, the recent flooding in Nigeria has been devastating, especially in Bayelsa State where more than 700,000 people in 300 communities and villages have been displaced. The Nigerian Government has mapped out plan to send a delegation to Cameroon to initiate a bilateral discussion with the Cameroonian authorities on the periodic opening of the Lagdo Dam. The flooding in Nigeria has become a critical issue as it affects the country’s major source of revenue. If the disaster is not curtailed, it may lead to a shutdown of major oil facilities in the affected regions. This may have an impact in the prices of AGO/MGO is the near future.

Source:  Nairametrics, Mediianews

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