• Saturday, June 15, 2024
businessday logo

BusinessDay

More pain for Nigeria as Shell declares force majeure on Forcados crude

Shell, others pay NDDC $142m in one year

Shell Production Development Company (SPDC), a subsidiary of Shell in Nigeria, has declared force majeure on exports of Nigerian Forcados crude oil after the obstruction of a tanker path by a malfunctioning barge.

The latest halt adds to Nigeria’s ongoing reliability issues that have hampered the country’s sales in recent months as the BusinessDay findings showed more than 200,000 barrels a day of Nigerian crude normally pass through the terminal.

The company said the force majeure started on Monday after the shutdown of a key pipeline as efforts were underway to restore access, according to an SPDC statement seen by Reuters on Wednesday.

Read also: Again, Nigeria misses from oil price gain as Shell shuts Forcados export terminal

Force majeure refers to a clause in contracts that allows both parties to walk out of the contract when an extraordinary event or circumstance beyond the control of the parties happens.

Growing threats by militants to renew attacks on oil infrastructure in the restive Niger Delta also pose a huge concern for Africa’s largest oil producer.

Nigeria has the capacity to produce around 2.2 million – 2.3 million b/d of crude and condensate, but production has averaged only around 1.62 million b/d in the first seven months of 2021, according to Platts estimates.