Why Shell declared ‘force majeure’ on Nigeria crude exports

Nigeria’s export of crude oil suffered a major setback as Shell Petroleum Development Company (SPDC) ON Tuesday declared force majeure on the export of Forcados grade of crude oil after it had shut down the 400,000 barrels per day capacity Forcados export terminal in Delta State.

The declaration of the force majeure freed the oil giant from contractual obligations to its customers due to circumstances beyond its control.

Shell and other third parties export crude oil from the Western Niger Delta through the Forcados terminal, which was once shut down on October 19, 2012, due to flooding and damage to the supply pipelines.

However, the company resumed loadings at the terminal on November 21, 2012 and also lifted the force majeure declared on exports of Forcados grade of crude oil.

Before Tuesday declaration of force majeure on Forcados exports, the export terminal had earlier been shut down when a leak was discovered in one of the pipelines on March 4, 2014.

SPDC’s spokesman, Mr. Precious Okolobo, said in a statement that SPDC Joint Venture declared force majeure on lifting of Forcados blend “effective 09:00hours (Nigerian time) Tuesday, March 25, 2014, due to ongoing repairs on the 48-inch crude export line at Forcados terminal in the Western Niger-Delta.”

“The subsea line was shut when a leak was discovered on March 4, 2014, leading to suspension of SPDC and third party crude oil exports through the terminal,” he stated.

The company had been repairing the leak on the subsea crude export line, which was immediately shut down when it observed the leak on March 4.

Shell has suffered continuous vandalism of its pipeline networks with the Vice-President, Nigeria and Gabon Shell Upstream International, Mr. Markus Droll, recently listing the challenges facing Nigeria’s oil and gas industry to include oil theft and security concern.

  

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