Nigeria Lost About 16% of Oil Output During 3-Day Dangote Strike
(Bloomberg) -- Nigeria suffered significant crude and gas production losses after a three-day oil workers’ strike that threatened to cut crude supplies to the Dangote refinery until it was called off.
Africa’s biggest crude producer lost 283,000 barrels of oil per day within the first 24-hours of the strike organized by the country’s largest oil union, Nigerian National Petroleum Co. Chief Executive Officer Bayo Ojulari said in a letter seen by Bloomberg and verified by the state-owned company’s spokesperson, Andy Odeh.
The union, the Petroleum and Natural Gas Senior Staff Association of Nigeria, ended the strike on Wednesday after the Dangote refinery agreed to reassign workers who were fired over alleged acts of sabotage.
The country also lost 1.7 billion standard cubic feet of gas per day and more than 1,200 megawatts of power generation, the letter sent to the Nigerian Midstream and Downstream Petroleum Regulatory Authority and Nigerian Upstream Petroleum Regulatory Commission said.
“This equates to around 16% of national oil output, 30% of marketed gas, and 20% of electricity generation,” said the letter, which was dated Sept. 29.
Nigeria produces an average of 1.5 million barrels of oil a day, while the biggest refiner on the continent meets between 35% to 50% of Nigerian gasoline demand.
The production loss is a major setback for Africa’s fourth-largest economy, which relies heavily on crude exports for foreign currency and aims to raise oil output to over 2 million barrels per day this year.
The strike also delayed the planned restoration of crude and monetized gas production under joint ventures and production sharing contract arrangements, according to the letter.
“It is our considered view that the current industrial action has impacts that extend beyond the Dangote refinery,” Ojulari said. The disruptions “posed systemic risks to energy supply, personnel and asset security and the wider economy,” he said.
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