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Shell reinstates force majeure on Bonny Light crude exports

12 Aug 2016, 05:05 pm
Financial Nigeria
Shell reinstates force majeure on Bonny Light crude exports

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- This is the second time in less than three months that SPDC has declared a force majeure on Bonny Light crude oil exports. 


Shell Petroleum Development Company (SPDC), the Nigerian operation of Royal Dutch Shell, has declared a force majeure on Bonny Light crude oil exports due to a leak to a major pipeline, according to a statement released on Friday.

This is the second time in less than three months that SPDC has declared a force majeure on Bonny Light exports. Early in July, SPDC lifted a force majeure that was put in place in May due to a leak on the Nembe Creek Trunk Line (NCTL).

The NCTL is one of the major pipelines that evacuate crude oil from OML 29 to the SPDC-operated Bonny Export Terminal in Rivers State. SPDC constructed the 100-kilometre NCTL in 2010, with a capacity of 600,000 barrels per day.

“SPDC declared force majeure on Bonny Light liftings effective 10:00hrs (Nigerian Time) today (August 12, 2016) due to shutdown of the Nembe Creek Trunk Line (NCTL) by the pipeline operator, Aiteo following a leak.” Seja Majeed, a Shell spokesman said in a statement. SPDC did not disclose the cause of the leak.

This is the second force majeure SPDC has declared this week, after announcing one on Wednesday on gas supplies to the Nigerian Liquefied Natural Gas Limited (NLNG). SPDC said the pipeline, which evacuates gas to the NLNG facility on Bonny Island, had been shut down for a joint investigation and subsequent repairs.

A force majeure is a clause in contracts that removes liability from an oil company when natural or unavoidable catastrophes interrupt oil shipments.

Nigeria’s oil and gas production has been hit hard by incessant militant attacks on oil and gas facilities in the Niger Delta, forcing many oil majors to announce force majeure on production.

Shell’s force majeure on Bonny Light exports will hurt Nigeria’s oil production, which fell to 1.4 million barrels per day earlier this month, according to Emmanuel Ibe Kachikwu, the Minister of Petroleum Resources.


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