The Oil Drum

On the heels of this weekend's Saudi Oil summit, Nigerian production has dropped to the lowest level in 25 years. This was in part because militant attacks shut in as much as 345,000 barrels per day of Nigerian production in the past few days. The Nigerian militant group MEND (Movement for the Emancipation of the Niger Delta) has demonstrated a continuing ability to interrupt production from Nigeria's mature, onshore fields. However, the future promise of Nigerian oil is not onshore. Rather, it is the 1.25 million barrels per day of offshore production scheduled to come on line in the next 6 years. Analysts previously believed these offshore facilities were out of MEND's reach.

This assumption--that far offshore facilities are beyond the reach of militants--must now be reconsidered. The week's most successful attack, shutting in 225,000 barrels per day, came against Shell's Bonga facility. At 120 km offshore, the Bonga attack demonstrated a new militant capability in the offshore environment. As Nigeria is one of the few states with the geological potential to significantly increase oil production and exports, the Bonga attack may prove to be an extremely important development.

Shell’s $3.6 billion “Bonga” Floating Production, Storage, and Offloading vessel (FPSO), 120km from shore in 1000m deep water, was recently attacked by MEND militants.

One of the Plenary speakers at the conference I am at this week, was Alan AtKisson who spoke on Sustainability.  One of the innovations in his talk was to have the audience join in song - for one of which the chorus was "Exponential Growth" - shades of the Bartlett Pair.  But sad to say, unlike their excellent presentations,  his talk, while emphasizing the point that we can't go on like this, did not indicate the immediacy of some of the boundaries to such growth.  

Not, of course that he is alone.  There is an NYT story today about the upbeat US economy, and the future thereof.  However in speaking of gasoline

Gasoline prices - the national average is now $2.15, according to the Energy Information Administration - have fallen because higher prices held down demand and Gulf Coast supplies have been slowly restored.

Hmm! And I suppose that those import loans had nothing to do with it?

But is the story even factually correct? Checking in with the EIA we see that, in fact, demand is up from 8.988 mbd a year ago to 9.124 mbd and it has now been higher than last year for over a month.