Nigeria Oil Production Hit Again After Shell Pipeline Explodes


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An attack that caused damage to an underwater pipeline is set to dampen operations of Nigerias Forcados crude oil to one of the countrys biggest export terminals until May.

Shell Petroleum Development Corporation (SPDC) which operates the pipeline, declared force majeure, which is essentially a common clause placed in contracts liberating both parties from liability in case of an extraordinary act making the execution of the contract impossible, on February 21, a week after the pipeline was hit by an explosion which caused a leak.

Emmanuel Ibe Kachikwu, minister of state for petroleum and the head of Nigerias oil company said that repairs to the pipeline could take up to May before a proper resolution.
I have been assured by Shell that in six to eight weeks, we will be back, said Mr Kachikwu.

Another source had this to say: The earliest the line could be back up with replacements and parts flown in [to Nigeria] is mid-May.

As a result of the oil spill, inflows to the terminal and exports out were stopped.
Almost 250,000 barrels a day of oil were scheduled to be exported from the Forcados stream in both February and March. The Forcados terminal has the capacity to export about 400,000 b/d.
The attack has indeed made production impossible. Production levels were at 2.3m b/d by 300,000 b/d.
The attack is suspected to have been carried out by militants who deployed divers, according to western security experts and diplomats.

Following the attack, Shell sent a team from Aberdeen in Scotland to assess the damage on the Trans Forcados pipeline that moves crude to the export terminal.

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