Lagos — State-owned Nigerian National Petroleum Corp said on Sunday that security challenges in the oil producing Niger Delta region, where production facilities have been hit by militants, could cripple the company and the Nigerian economy, if the unrest is not urgently checked.
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"If the current situation [in the delta] remains unchecked, it could lead to the crippling of the Corporation and the nation's oil and gas sector, the mainstay of the Nigerian economy," NNPC said in a statement.
Nigeria has already slipped into a recession, as its oil output slumped to 1.69 million b/d in the second quarter of this year due to renewed militancy in the Niger Delta, according to data released August 31 by the National Bureau of Statistics.
"Insecurity is threatening production and damaging the Niger Delta environment. There is the urgent need for government and security agencies to refocus as well as engage the various host communities ... toward finding a lasting solution to the present unrest," NNPC said.
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NNPC, which manages government interest in joint venture oil businesses with foreign companies, recorded a deficit of Naira 26.51 billion ($84 million) in June due to attacks on oil pipelines, S&P Global Platts previously reported.
The corporation continues to struggle to provide the required cash calls to fund joint venture oil projects, and is indebted to its foreign partners to the tune of over $6 billion.
The militant group Niger Delta Avengers, responsible for most of the attacks on the oil facilities said early this month that it was observing a ceasefire to allow for negotiations with the government. But other splinter militant groups in the region continued to carry out intermittent attacks on the facilities.
--Staff report, firstname.lastname@example.org
--Edited by Geetha Narayanasamy, email@example.com