FX.co ★ Explosion in Nigeria pushes oil to $90

A vessel containing approximately 2 million barrels of oil exploded near the coast of Nigeria. It caused a hike in oil prices, with WTI hitting $90 per barrel.

Nigeria is actually gearing up to crack down on oil theft to boost production. It hopes to reduce it by $4 billion a year because reportedly, the country is losing up to 150,000 barrels of oil per day because of criminals who illegally connect to pipelines crossing the Niger Delta region. At current prices, the missing barrels are costing Nigeria about $4 billion a year. Gbenga Komolafe, CEO of Nigerian Upstream Regulatory Commission (NURC), said the government approved measures aimed at curbing illegal activities.

However, extensive repairs will require more serious measures than reducing the theft of crude oil. After all, production in the country has fallen to 1.5 million bpd, from 1.7 million bpd.

Another problem is that oil revenues have reduced to half the amount expected. Oil companies such as Shell and ExxonMobil were also selling off their remaining onshore and offshore assets to focus on deepwater projects, leaving the industry to local producers.

Komolafe said 57 fields were transferred to 161 domestic companies in May, while about 80% of the bidders met the payment deadline. Some domestic producers, already licensed by outgoing international companies, have been able to demonstrate competitiveness and thrived.