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
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