Nigerian oil close to capacity after Forcados force majeure lifted

PUBLISHED: Wed, 07 Jun 2017 13:47:31 GMT

LONDON (Reuters) – Royal Dutch Shell lifted force majeure on exports of Nigeria’s Forcados crude oil, a spokeswoman said on Wednesday, bringing all of the West African country’s oil exports fully online for the first time in 16 months.

The resumption of Forcados, which typically exports 200,000-240,000 barrels per day (bpd), bringing Nigeria to around the 1.8 million-bpd level the government said it wanted to achieve before joining OPEC output cuts, from which it is now exempt.

Force majeure is a legal declaration that means the operator cannot fulfill a contract due to circumstances outside its control.

The Organization of the Petroleum Exporting Countries and some other producers agreed last month to extend output cuts of about 1.8 million bpd until March. The initial six-month deal had been due to expire at the end of this month.

Nigeria and Libya, whose output has been disrupted by unrest and other factors, were both exempted from the curbs.

Forcados had been under force majeure since February 2016 after a militant attack on the main export route, the Trans Forcados Pipeline. Despite a brief resumption in the autumn of 2016, militants struck again and force majeure was not lifted.

Last week, Shell issued a loading programme for June exports that lifted planned exports from Nigeria to 1.75 million bpd, taking it to at least a 15-month high.

On Wednesday, one trader said the programme had been revised higher to 252,000 bpd, putting crude oil exports for the month at 1.8 million bpd.

“The Shell Petroleum Development Company of Nigeria Ltd (SPDC) lifted the force majeure on crude oil exports from Forcados Terminal,” the firm said in a statement on Wednesday, saying the move was effective from 4 p.m. (1500 GMT) on Tuesday.

“SPDC is grateful to various stakeholders, particularly the federal and Delta State governments, security agencies, NNPC and communities for their support in the repair of the three sabotage leaks on the pipeline,” it said.

The lifting marks the first time in 16 months that all of Nigeria’s oil grades were free of loading disruptions severe enough to require force majeure.

(Reporting by Libby George; Editing by Louise Heavens and Edmund Blair)

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