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Nigeria to lose N199bn to Forcados terminal closure

By on April 16, 2016

Nigeria is set to lose as much as $1bn (about N199bn) from the force majeure on Forcados loadings that has been in place since February and which is set to continue until May.

Force majeure is a term in a contract that can be invoked when conditions beyond the control of the company make it impossible to fulfil the terms to which it originally agreed.

Bloomberg sources quoted the International Energy Agency as saying that Nigeria stand to lose an estimated $1bn as a result of the closure of the terminal.

The IEA said, “The Forcados terminal in Delta State, one of Nigeria’ biggest terminals, was scheduled to load 250,000 barrels of crude per day. At $40 per barrel, Nigeria could stand to lose an estimated $1bn between February, when force majeure was declared, and May, when repairs are expected to be completed.”

Shell Petroleum Development Company of Nigeria Limited reportedly put the grade under force majeure on February 21, a week after a pipeline leak forced it to halt loadings to the export platform.

Production into the terminal and crude oil exports were stopped soon after the spill on the Forcados Terminal subsea crude export pipeline was discovered.

Reuters had quoted local and trading sources as saying that it was likely to take until early April before the pipeline would be repaired, and oil production and flow to the export terminal resumed.

 

[Punch]