Nigeria loses 400,000 Barrels per day As Shell Declares Force Majeure on Crude Exports
Major oil company, Shell Petroleum Development Company of Nigeria Limited on Wednesday declared a “force majeure” on its Bonny Light exports leading to the loss of about 400,000 barrels per day in Nigeria’s estimated oil production.
The declaration of a “force majeure” is done when circumstances beyond a company’s control affect its ability to deliver on contracts signed with other parties and in this instance, it allows Shell to stop oil shipments without breaching its contracts with the Nigerian authorities.
Shell in a statement signed by its spokesperson, Mr Bamidele Odugbesan, on Wednesday stated that the force majeure took effect from Tuesday, May 10, 2016.
According to Punch, the oil major refused to disclose the cause of a leak which it said necessitated the declaration of the force majeure and closure of the Nembe Creek Trunk line for repairs by the operator, Aiteo Eastern E & P Company Limited.
The closure may however not be unconnected with recent attacks on oil facilities and pipelines by a new militant group, the Niger Delta Avengers who had earlier claimed responsibility for an attack on Shell oil pipeline, which shut down the 250,000bpd Forcados export terminal in February 2016 necessitating a declaration of a force majeure.
With the disruption of operations at the Bonny export terminal, about seven cargoes are expected to be affected, representing a combined volume of 217,000 bpd. It has a capacity of 600,000 bpd, according to Shell’s website.
The halt in Bonny Light loadings comes less than a week after Chevron said 35,000 bpd of its Nigerian net crude production had been halted by an attack on its offshore Okan facility, barely three months after Shell suspended production at Forcados.
If all Bonny Light production is cut, it will bring output to below 1.5 million bpd for the first time since September 1994, according to Energy Information Administration data. Nigeria exports almost all its crude oil production
ENJOY FREE CONTENTS FROM US
IN YOUR EMAIL
Breaking News, Events, Music & More
Thank you for subscribing.
Something went wrong.