The Federal Government on Wednesday bemoaned the effects of the violence in the Niger Delta, saying that Nigeria’s oil production capacity had dropped by more than a million barrels per daOil sold for about $60 per barrel in the international market on Wednesday, and going by that figure, Nigeria is recording a loss of about N8.7bn daily.

The Federal Government also expressed regrets over the rising casualty figures being recorded in the campaign by the Joint Task Force to dislodge militants in the Niger Delta.

Apart from the unspecified number of deaths, some communities have been destroyed, hundreds wounded and thousands rendered homeless.

The Minister of State for Petroleum, Mr. Odein Ajumogobia, made the Federal Government’s view on the situation known to journalists after the Federal Executive Council meeting in Abuja.

Ajumogobia spoke after journalists sought to know the implication of the current situation in the region on the country’s oil production capacity.

He said, “It is something we are all sad about. Nigeria has a production capacity of 3.2 million barrels a day; today we are down to about less than half of that in terms of production. We are over one million (barrels per day) down in shut in. I think it is something that should concern all of us.”

Most of the one million barrels of production currently shut in belong to Shell Petroleum Development Company of Nigeria Limited. Some of the production had been shut in since February 2006. A similar crisis had seen SPDC‘s production decline from one million barrels per day to 380,000 barrels per day in 2008. Chevron and Agip have also been hit by militant activities, which have resulted in the shutdown of swamp fields in the Warri area as well as fields in the eastern operations.

When asked to give an assessment of the crisis, the minister said the military authorities would be in a better position to do so.

But he admitted that the loss of lives, whether of militants or soldiers, was regrettable.

Ajumogobia added that the government had been restraining the armed forces from using maximum force.

He said, “I understand that the military high command is about issuing a statement and theirs will be more accurate and precise.

“I will say, however, that the loss of lives, whether militants or members of the armed forces, is sad. I mean they are all Nigerians and so we will try and do what we can to prevent loss of lives.Everything this administration has been doing is to restrain the military in its activities to try and minimise loss of lives.

“So far, what is going on today in Niger Delta, I think it is best to hear from the military; they will be able to give you a more accurate account.”

The minister further expressed regrets that onshore oil production activities had suffered most in the course of the crisis.

Onshore oil production activities were cheaper, and had a higher return on investments, Ajumogobia explained.

Ajumogobia said, “Mainly onshore. To take one example, Shell has lost most of its production; the East is completely shut down and the irony of it is that onshore is the cheapest to produce and therefore the return on that investment is greater but that is where we have most of the shut ins”.

The minister also said the government was on the verge of ending fuel scarcity in the country.

The minister said, “What I see on the streets shows that the situation has improved tremendously. We have conquered the supply problem.There was a deficit of supply that I talked about the last time.

“I think we have conquered the supply problem, there are still some distribution bottlenecks so you will still see some queues in some areas in some cities; but we will get around that as well.”

Meanwhile, about 3,000 oil workers have been evacuated from various fields in Delta State.

It was gathered that the oil workers were airlifted into Warri through Osubi Airport operated by Shell Petroleum Development Company in the state.

Sources said on Wednesday that about 15 oil platforms and flow stations had been shut down by oil companies in the Niger Delta in the past one week.

The Minister of Environment, Mr. John Odey, also spoke on the effects of the military activities in the Niger Delta on the environment.

Odey, who was responding to questions concerning the environmental impact of the military onslaught, said, “There are implications as far as environment issues are concerned, and on human activities generally.

“If there are any adverse effects of the actions of militants or even the military, it could affect the environment adversely.

“Let us even talk about the oil spillage that of course will negatively impact on the soil and at the same time pollute the water; and this water is of course a source of resource for us.

“Our community people farm and have their livelihoods from this resource and as such it will have a negative impact”.

The minister said the Federal Government was not unmindful of the environmental implications, and would try to mitigate them.

He said, “Government of course will try as much as possible to see how some of those impact as a result of human action can be remediated.

“That is why we went to FEC today (Wednesday) with a request for an oil spill response boat and other equipment that will be used in the Niger Delta region and other parts of the country.

“It is part of the determined efforts of government to ensure that efforts in terms of response to an oil impacted area are effective.”

The FEC had at the meeting, which was chaired by President Umaru Yar’Adua, approved a contract for the procurement of oil spill response boat and equipment for the National Oil Spill Detection and Response Agency.

NOSRA is the agency charged with the responsibility of coordinating the response to oil spillage in parts of the country, particularly the oil producing communities of the Niger Delta.

The Minister of Information and Communications, Prof. Dora Akunyili, who announced the approval of the plan to purchase the equipment, said the move would facilitate prompt clean up and containment of oil spills.

The oil spill response boat and equipment will be procured for about N558.9m.

Also on Wednesday, the FEC set up a committee to review a report on all ongoing projects by the Ministry of the Federal Capital Territory Administration.

The FCT Minister, Senator Adamu Aliero, had at the meeting presented a comprehensive report on the outstanding projects.

The projects include the provision of engineering infrastructure in the satellite districts in the FCT, as well as the erection of the controversial Cultural Centre in the city.

The committee, which consists of the ministers of National Planning, FCTA, Works and Housing, and three other unnamed ministers, is expected to propose the modalities for funding the outstanding projects.