Shell can't say when will lift Nigeria force majeure

Tue Oct 23, 2012 3:08pm GMT
 

By Tim Cocks

LAGOS (Reuters) - Royal Dutch Shell cannot yet say when a force majeure on two grades of Nigerian crude oil will be lifted, after production stoppages caused by theft and flooding cut up to 20 percent of exports from Africa's top supplier.

On Monday, Shell said its Nigerian venture had declared force majeure on exports of the Bonny and Forcados crudes on Friday, citing damage caused by thieves and flooding affecting a third-party supplier it did not identify.

"Shell cannot yet say at this time when the force majeure will be lifted," Shell spokesman Precious Okolobo said by telephone on Tuesday, declining to give further details. Shell is Nigeria's biggest oil operator.

Nigeria's oil is exported to the United States, Asia and Europe and supply disruptions can affect world prices because it is priced against the Brent oil benchmark. Brent fell by $1.70 a barrel to below $108 on Tuesday, a smaller decline than the U.S. crude benchmark.

Separately, French oil company Total on Tuesday told Reuters it had stopped oil and gas production from its onshore OML 58 block due to flooding. The block, in which Total has a 40 percent stake, normally produces the equivalent of 90,000 barrels per day (bpd) of oil.

Total confirmed that output produced in OML 58 is exported via Shell's Bonny terminal, in which the French group owns 10 percent.

Bonny Light and Forcados are two of Nigeria's most important oil grades and in October accounted for 427,000 bpd, about a fifth of the country's total exports of 2.048 million bpd.

A force majeure allows a company to suspend contractual obligations in the face of unexpected events. Oil trading sources said exports of Bonny and Forcados were continuing, but exports were delayed by around five days.   Continued...

A logo is seen under a canopy of trees at a Shell petrol station in central London July 29, 2010. REUTERS/Toby Melville

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