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Shell declares force majeure on Forcados oil export

By BusinessNews Staff on March 27, 2014

The Shell Petroleum Development Company Joint Venture has declared a force majeure on oil lifting from the Forcados Terminal.

The company, in a statement on Tuesday, said the force majeure became effective from 09:00 hours on Tuesday, March 25, 2014, due to ongoing repairs on the 48-inch crude export line at the Forcados Terminal in the western Niger Delta.

The term force majeure is frequently used in contracts to protect the parties in the event that a segment of the contract cannot be performed due to causes that are outside the control of the parties such as natural disasters that could not be evaded through the exercise of due care

The subsea line was shut when a leak was discovered on March 4, 2014, leading to suspension of crude oil exports through the terminal by SPDC and third party partners.

As a result of the development, about 400,000 barrels per day of crude exports had been affected by the closure, more than a fifth of the 2.2 million barrels produced daily by the country.

Shell’s spokesman, Mr. Precious Okolobo, said that the terminal’s subsea crude export line was closed on March 4 as soon as the leak was detected, adding that the cause of the leak was still being investigated.

He, however, said on Tuesday that helicopter over-flights showed a slight sheen around the export line.

Okolobo explained that a joint investigation conducted by representatives of the communities, SPDC, regulators and security agencies determined that the leak was caused by a third-party interference.

“Unknown persons had installed a crude theft point on the line in water depth of about eight metres,” he said.

According to the statement, SPDC has mobilised equipment and materials to the site and is working to repair and reopen the line as soon as possible.

Ship-tracking data showed that one Suezmax tanker had been in the vicinity of the Forcados terminal since March 9, indicating a waiting period of at least two weeks, Reuters reported.

The government says it is losing about 200,000 barrels of crude daily to oil thefts. Those have been limited to hacking into pipelines on land in the Niger Delta.

Shell and other third parties export crude oil through the terminal, which was shut on October 19, 2012 due to flooding and damage to the supply pipelines.

[Punch]

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