Nigeria loses N115bn due to crude terminal shutdown
Dec 27, 2016: With global oil prices trading above the $50 per barrel mark since November 30, the shutdown of the Forcados terminal, through which Nigeria’s largest crude oil grade is exported, has led to a loss of at least N115bn in 24 days.
Shell, the operator of the terminal had declared force majeure on the export of Forcados 10 months ago.
The force majeure, a legal clause that allows it to stop shipments without breaching contracts, came a week after the Forcados export line was attacked by militants in the Niger Delta. In early November, there was another attack on the Trans Forcados oil pipeline carrying crude oil and gas to the Forcados export terminal.
According to the Nigerian National Petroleum Corporation, at Forcados terminal alone, about 300,000 barrels of oil per day have been shut in since February 2016 following the force majeure declared by Shell Petroleum Development Company.
“A number of crude oil lifting was deferred until the repair is completed. Other major terminals affected by the renewed spate of vandalism include Bonny, Usan, Qua Ibo, and the recently attacked Nembe Creek trunk line,” the NNPC said in its latest monthly report.
The International Energy Agency had in April estimated that Nigeria could lose about $1bn (N197bn) in revenue by May, when repairs of the Forcados terminal were expected to have been completed.
The IEA said, “The Forcados terminal in Delta State, one of Nigeria’s biggest terminals, was scheduled to load 250,000 barrels of crude per day. At $40 per barrel, Nigeria could lose about $1bn between February, when force majeure was declared, and May, when repairs are expected to be completed.”