Nigeria’s crude oil production declined to an average of 1.4 million barrels per day (bpd) in February, a sharp drop from January’s 1.737 million bpd, raising fresh concerns about the country’s oil sector stability.
The latest crisis stems from a dispute between Pennington Production Limited, a subsidiary of the Nigerian National Petroleum Company Limited (NNPCL), and host communities in Bayelsa State over the termination of a security contract.
A letter obtained by The Guardian, dated March 28, 2025, and signed by representatives of eight affected communities, warns of an imminent shutdown of operations at Oil Mining Leases (OMLs) 86 and 88 if their demands are not met. The signatories include Chairman Christopher Tuduo (Ezetu 1), Dr. Amakiri Ngozi (Fishtown), Tuadei Alex C. (Ezetu 2), Mr. Aneri Ebimene (Ekeni), Ileberi Ebiwei (Koluama 2), Thankgod Bunafigha (Koluama 1), Saighe Martins (Ezetu 2), Ekemeghuesuotei Sese (Foropa), and Uroh Kiani (Sangana).
The communities accuse Pennington Production Limited of breaching long-standing agreements by terminating the contract of Multiplan Nigeria Limited, a community-nominated security contractor, and reducing the number of community security vessels from three to two. One of the remaining contracts has now been awarded to a contractor unknown to the host communities, a move they say violates past agreements.
Chevron Nigeria Limited (CNL), the previous operator of the oil fields, had originally provided the security vessels in 2007 as part of efforts to curb unrest and safeguard the region. The communities stress that when NNPCL took over the fields from Chevron in 2021, it agreed to inherit all existing liabilities and contracts, including the security vessel agreements.
Communities Issue Ultimatum
The letter, addressed to NNPCL Exploration & Production Limited (NEPL), demands:
• Reinstatement of all three security vessel contracts
• Full payment of outstanding invoices from 2024
• An urgent meeting with NEPL’s management within seven days
If these demands are not met within 14 days, the communities threaten to shut down production at OMLs 86 and 88.
The dispute comes at a critical time for Nigeria’s oil sector, which has struggled with pipeline vandalism, oil theft, and declining output. Analysts warn that further disruptions could put additional strain on the country’s revenue generation and economic stability.
NNPCL and NEPL have yet to respond to the communities’ demands.
