Shell lifts force majeure on Forcados crude exports

Shell+Logo16 May 2014, Lagos – Exactly seven weeks after it declared force majeure in the export of crude oil from the Forcados terminal, the Shell Petroleum Development Company (SPDC) joint venture yesterday lifted the force majeure.

The federal government and the International Oil Companies (IOCs), including SPDC and Chevron Nigeria Limited, lost an estimated $1billion to the closure of the export terminal, following a subsea leak, which was discovered on March 4  before the force majeure was declared on March 25.

Suspected Niger Delta militants claimed the initial damage, and disclosed further on March 27 that its divers had inflicted further damage on the subsea export pipeline, which was under repair.

Though the oil giant did not disclose how much crude oil was not being exported due to the closure, THISDAY gathered that over 200,000barrels per day was being shipped abroad through the 400,000barrels per day export terminal at the time it was closed on March 4.

Shell’s Media Relations Manager, Mr. Precious Okolobo, confirmed in a statement that the force majeure was lifted yesterday.

“SPDC lifts force majeure on crude exports from Forcados terminal, effectively 9a.m. Nigerian time, today, May 15 (yesterday). SPDC joint venture lifted the force majeure on crude oil exports from Forcados following the removal of a crude theft point on the export line. The subsea line was shut when a leak was discovered on March 4, leading to the declaration of force majeure on March 25, to allow for repair work,” he explained.

Forcados, which is used by SPDC, Chevron and other IOCs, to export crude oil from the Western Niger Delta, accounts for the shipment of one-fifth of Nigeria’s production of 2.2 million barrels per day.

At average price of $100 per barrel, the non-export of a conservative estimate of 200,000 barrels per day translates to a loss of $20million per day and over $1billion since the facility was shut down over seven weeks ago.

Nigeria’s export of crude oil suffered a major setback when SPDC declared force majeure on the export of Forcados grade of crude oil after it had shut down the facility.

The declaration of force majeure freed the oil giant from contractual obligations to its customers due to circumstances beyond its control.
The terminal was once shut down on October 19, 2012, due to flooding and damage to the supply pipelines.



– Ejiofor Alike, This Day

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