Nigeria: Shell, ENI Declare Force Majeure After Attacks

Aerial view of Nigeria Liquefied Natural Gas (NLNG) plant at Bonny Island in Rivers State on March 22, 2013. Shell Petroleum Development Company of Nigeria (SPDC) has threatened to shut down production in April for nine days in the entire Nembe Creek Truck Line (NCTL) to remove a number of bunkering points on pipelines vandalised by oil thieves in the region. “Whenever we observe a spill, or have a spill on our lines, we shut down production to depressurize and isolate the line, only then can we safely repare our lines because it is then safe to manipulate the line”, said Jurgen Jonzen, SPDC corporate pipeline asset manager. Last year, 157 bunkering points were removed and 116 were leaking on the whole SPDC exploitation. Since 2009, SPDC has exprienced an upsurge in vandalisation of pipeline network by criminals causing severe environmental devastation of the region and forcing the company to lose 60 000 barrels daily this year. AFP PHOTO / PIUS UTOMI EKPEI (Photo by PIUS UTOMI EKPEI / AFP)

In Nigeria, oil servicing companies Shell PLC and ENI SpA have both declared force majeure on key oil pipeline flows in the Niger Delta, further compounding the supply issues already created by the crisis in Ukraine.

Shell announced that its measure had been in place since March 3 and applies to its Bonny export programme. ENI declared its measure following a pipeline blast in Bayelsa, south-south Nigeria which affects its Brass crude delivery.

This is coming as Nigeria already has missed its OPEC production quota in recent months and is likely to exacerbate the country’s revenue inflow as well as the importation of petroleum for domestic use.

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The two Nigerian grades – Bonny Light and Brass River – were part of a shipment programme of 170,000 barrels of crude per day for April, less than 320,000 barres which it was as of 2020.

Force majeure is a legal step that allows companies not to meet contractual obligations due to factors not in their control. Shell and ENI’s measure is will impact the planned 1.7 million barrels per day output for April. Nigeria’s oil industry has a history of attacks, vandalism on infrastructure and outright theft which makes it impossible for the government to earn what is due from oil exports.

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