Shell Petroleum Development Company of Nigeria Limited has lifted the force majeure on exports of the country’s Forcados crude oil, bringing all of the nation’s oil exports fully online for the first time in 16 months.
According to Punch Nigeria, the SPDC declared the force majeure on February 21, 2016, a week after the main export route, the Trans Forcados Pipeline, was attacked by militants in the Niger Delta.
Force majeure is a legal declaration that means the operator cannot fulfil a contract due to circumstances outside its control.
The resumption of Forcados, which typically exports 200,000 to 240,000 barrels per day, has brought the country to around the 1.8 million barrels per day that the government said it wanted to achieve before joining the Organisation of Petroleum Exporting Countries in cutting output to prop up oil prices, according to Reuters.
OPEC and some other producers agreed last month to extend output cuts of about 1.8 million bpd until March. The initial six-month deal is due to expire at the end of this month.
Nigeria and Libya, whose output has been disrupted by unrest and other factors, were both exempted from the curbs.
According to the Nigerian National Petroleum Corporation, at Forcados terminal alone, about 300,000 bpd of oil were shut-in following the declaration of the force majeure.
The corporation also said over 1,500 megawatts of power was lost to the attack on the Forcados pipeline, which is Nigeria’s major artery, with gas supply from it accounting for 40 per cent to 50 per cent of total gas production in the country.
In October, Shell resumed exports of crude oil from Forcados terminal following repairs but the production wells were shut-in again due to the shutdown of the Trans Forcados Pipeline on November 9, 2016 as a result of sabotage on the 48-inch crude export line.
Last week, Shell issued a loading programme for June exports that lifted planned exports from Nigeria to 1.75 million bpd, taking it to at least a 15-month high.
The lifting marks the first time in 16 months that all of Nigeria’s oil grades are free of loading disruptions severe enough to require force majeure.
Did you find this article informative? Kindly like, comment and share!