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Nigeria faces oil output slump as Exxon shuts flows
The logo of Exxon Mobil Corporation is shown on a monitor above the floor of the New York Stock Exchange in New York, December 30, 2015. PHOTO BY REUTERS/Lucas Jackson
By Florence Tan and Simon Falush
14/05/2016
SINGAPORE/LONDON (Reuters) - U.S. oil major Exxon Mobil Corp said on Friday it has suspended exports from Nigeria's top crude stream, adding to economic strains from unrest and violence that have cut production to its lowest in decades.
Exxon Mobil said it had declared a force majeure - a suspension of deliveries because of events beyond its control - on Nigeria's Qua Iboe crude oil grade, and that a portion of production had been curtailed after a drilling rig damaged a pipeline.
In a separate incident on Friday, an explosion rocked Chevron Corp's oil well at the Marakaba pipeline in Warri in Nigeria's Delta region, a security source said, the second blast at a facility of the U.S. oil major within a week, feeding concern over a revived militant campaign in the area.
Chevron had no immediate comment, while Nigeria's army, which has stepped up its presence in the region, could not immediately be reached for comment.
Last week, Chevron said its platform in the Delta was attacked by militants.
The outages adds to production problems at two of the other largest crude streams, Bonny Light and Forcados, which have already taken Nigeria's output to a 22-year low.
Royal Dutch Shell shut a major pipeline earlier this week and declared force majeure on Bonny Light crude exports on Wednesday, while an attack in February on a pipeline also caused it to shut the 250,000 bpd Forcados export terminal.
Nigeria's oil production has fallen to 1.65 million barrels per day (bpd) due to militant attacks, Finance Minister Kemi Adeosun said on Friday, from 2.2 million bpd.
If outages at Qua Iboe and other streams are prolonged, Nigerian output could fall to around 1.2 million bpd, according to Reuters calculations. This would be the lowest output since 1970, according to BP's statistical review.
Nigeria had been Africa's largest crude exporter with its economy heavily reliant on oil up until this year, when rampant oil theft and corruption has kept production well below capacity.
As a result, Angola has overtaken Nigeria as the continent's largest producer since March, according to OPEC figures.
Oil prices have jumped around 20 percent so far this quarter, their biggest such rise since 2011.
Brent crude has surged to $47 per barrel from $27 in January, in part because of production problems in Africa's former largest producer as well as a decline in U.S. output.
Nigeria was due to export 337,000 bpd in May, according to initial loading programmes released in March.
(Additional reporting by Libby George in Washington D.C., Terry Wade in Houston, Felix Felix Onuah in Abuja and Tife Owolabi in YENAGOA, Nigeria; Editing by Ruth Pitchford and Marguerita Choy)
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