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Oil prices rise above $47 as Exxon Mobil declares force majeure

15 Jul 2016, 04:57 pm
Financial Nigeria
Oil prices rise above $47 as Exxon Mobil declares force majeure

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- Exxon Mobil said it observed a "system anomaly" during a routine check of its Qua Iboe terminal.

A pumpjack on an oilfield

Oil prices rose on Friday following the declaration of a force majeure by Mobil Producing Nigeria, a subsidiary of US oil giant, Exxon Mobil.

As at 3.49 GMT, Brent crude, the global benchmark, rose 0.57 percent to $47.64 at London’s Intercontinental Exchange, while West Texas Intermediate, the US benchmark, fell 0.42 percent to $45.87 at the New York Mercantile Exchange.

Exxon Mobil's spokesman, Todd Spitler, said on Friday that the company observed a "system anomaly" during a routine check of its Qua Iboe terminal in Eket, Akwa Ibom. The company has since declared a force majeure on exports from the terminal.

A force majeure is a clause in a contract that allows an oil company to suspend crude oil shipments without breaching contracts.

"We are working to ensure loading activities at the facility return to normal. We cannot speculate on any timeline for repairs," Spitler said in a press statement.

Earlier this week, the Niger Delta Avengers, a militant group in the oil producing region, claimed that it had attacked a Qua Iboe pipeline operated by Exxon Mobil, but the company denied the report.

The incessant attacks on oil installations in the Niger Delta by militants has significantly depleted Nigeria’s oil output. Nigeria’s oil production fell by 800,000 barrels per day to 1.3 million bpd in May.

However, Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, said in June that the country’s oil output had risen to between 1.8 million bpd and 1.9 million bpd and would rise further to 2.2 million bpd this month if repair work on a major pipeline is completed.


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