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Forcados crude exports may be halted for months

By on July 24, 2016

Nigeria’s Forcados crude oil exports may remain halted for a month or more as pipeline repairs continue following a rash of militant attacks since February, according to an industry source familiar with the matter.

The Shell Petroleum Development Company of Nigeria Limited, a local affiliate of Shell, exports Forcados crude oil from Nigeria.

A spokesman for SPDC was quoted by Reuters as saying, “We have no new updates but are committed to bringing the line back as soon as possible. We can’t give any specific timing.”

Nigeria’s oil minister, Emmanuel Ibe Kachikwu, said earlier this month that repairs would be completed by the end of July.

Forcados exports were between 250,000 and 300,000 barrels per day prior to an unusually sophisticated attack by a militant group on an underwater pipeline in February.

A militant group known as The Niger Delta Avengers later hit other major installations and brought the country’s output to the lowest in decades earlier this year. Nigeria, which is a member of the Organisation of Petroleum Exporting Countries, depends on oil sales for the bulk of government revenues and nearly all its foreign exchange.

Top officials said on Thursday the government was in talks with the NDA, which the group has denied several times, and that output was down by 700,000bpd. In June, officials said they had secured a one-month ceasefire but attacks resumed sooner.

The country normally produces around two million bpd of crude.

On June 3, Niger Delta militants dipped the nation’s oil export further, blowing up the Forcados 48 inches under-repair SPDC terminal pipeline in Burutu Local Government Area of Delta State.

The attack was said to have occurred at about 3am.

The NDA claimed responsibility for the attack in a series of tweets.

The SPDC had continued repairs on Forcados despite the militants’ warning after the first attack. But the firm did confirm signs of a leak on the 48-inch Forcados export pipeline at a location between shoreline and the Forcados terminal in the western Niger Delta.

The oil major had then said, “We are yet to fully evaluate the potential impact and damage to the pipeline resulting from this latest incident. We have however mobilised appropriate oil spill response measures and will be conducting a joint investigation visit to the leak site with relevant stakeholders.

“We are currently focused on securing the pipeline to protect the environment. Given this latest incident and the wider security situation in the Niger Delta, we are unable to determine probable timing of resumption of exports from the Forcados terminal.” Earlier in February, Shell declared force majeure — a legal clause that allowed it to stop shipments without breaching contracts — after militants blew up a pipeline feeding the Forcados export terminal, knocking out at least 250,000 barrels per day.

 

[Punch]