Exxon Mobil Corp. has declared force majeure on crude oil liftings from various terminals in Nigeria due to an industrial action by the company’s in-house workers union, according to a statement released on Monday.
This declaration comes as Nigeria aims to increase its production to 1.6 million barrels per day (bpd) in order to regain its position as the largest African producer within the Organisation of the Petroleum Exporting Countries (OPEC).
In the third quarter of last year, Nigeria’s production fell behind Angola to approximately 1 million bpd due to companies like Shell PLC and TotalEnergies scaling back their operations, particularly in onshore areas that have long been plagued by theft and spills.
In February, Nigeria’s production was recorded at 1.38 million bpd according to OPEC’s latest report.
Exxon has also been trying to sell $1.2 billion worth of shallow-water assets in Nigeria, citing operational challenges, while maintaining its deep-water assets further away from the coast, as stated in a Reuters report in February.
The news of Exxon’s force majeure declaration and the uncertainty surrounding potential interest rate hikes by the U.S.
Federal Reserve have caused oil prices to decline, with Brent crude futures dropping 55 cents, or 0.6%, to $85.76 a barrel as of 1240 GMT on Monday. Exxon spokesperson Michelle Gray assured that the company is taking necessary actions to resolve the impasse as soon as possible.