Shell asks shippers exporting Nigerian oil to sign guarantee

*Crude oil vessel.

*Crude oil vessel.

11 October 2015, London – Royal Dutch Shell has asked ship owners exporting its Nigerian oil to sign a “letter of comfort” (LoC) to guarantee it is not stolen, according to an email from the company seen by Reuters.

In July, the state-run Nigerian National Petroleum Corporation (NNPC) banned more than 100 tankers from Nigeria’s waters, citing a directive from President Muhammadu Buhari who wants to trace and recover what he calls “mind-boggling” sums stolen from the oil sector.

Last month, the NNPC lifted the ban but asked ship owners to sign a letter of comfort to “guarantee to indemnify” it against any illicit use of their vessel.

This led some owners to reject pending bookings. “Please be informed we expect LPG & Products ship owners to sign the NNPC LoC for any future Shell loading voyages,” the email said.

“Shell (is) putting (its) reputation on the table that warrants the cargo is NOT stolen and this should remove any concerns ship-owners have around bad title down the oil chain,” the email said. Traders said the email showed that oil companies, trading houses and tanker owners were ensuring actions taken by Nigeria to prevent oil theft did not affect the market.

“I’ve not seen any vessels waiting around (outside oil loading terminals) because of the measures,” one trader said. Shell had no immediate comment.
*Simon Falush; Florence Tan; David Clarke – Reuters

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