Shell Declares Force Majeure on Nigeria Oil Grade

Shell Petroleum Development Company of Nigeria Ltd. has declared a force majeure on the loading of Nigeria’s key crude grade Forcados.

Shell announced the force majeure on August 16 but said it had been placed three days earlier.

It said the action was due to “the curtailment of production and suspension of export operations,” the company said in a statement.

Forcados is a gasoil-rich sweet crude blend and one of Nigeria’s most important export grades. Recent months have seen output average around 200,000 barrels per day, compared to its full capacity of 250,000 barrels per day.

For a variety of reasons, including operational and technical issues, the production of key crudes like Bonny Light, Escravos, Forcados, and Qua Iboe has been disrupted.

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Forcados is also struggling with persistent sabotage in the past few months due to its heavy dependence on pipelines.

According to S&P Global Platts Analytics, Nigeria will be one of the biggest risks to OPEC+ production growth in 2021.

“We forecast August crude supply to average 1.36 million b/d down from 1.48 million b/d in July and 1.66 million b/d as recently as February,” it said in a recent note.

“Our outlook for growth to 1.75 million b/d by December faces notable uncertainty, even without rising risks of coordinated attacks on oil infrastructure.”

For Africa’s biggest oil producer, threats by militants to strike oil infrastructure in the restive Niger Delta are another major source of concern.

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In the first seven months of 2021, Nigeria had an average oil production of 1.62 million barrels per day, according to Platts estimates. The country has the capacity to produce 2.2 million-2.3 million barrels per day of crude and condensate.

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