Business

Nigeria’s oil output drops by 150, 000 bpd under Shell’s force majeure

NIGERIA’s daily oil output has dropped by 150,000 barrels per day (bpd) as a result of the shutdown of Nembe Creek Trunk Line.

In its 2018 budget, the Federal Government had earlier projected to produce 2.3 million bpd at the reference price of $51 per barrel. But with this development the target would not likely be met.

 

Already, Shell Petroleum Development Company of Nigeria Limited has declared a force majeure to protect itself against any liability with international oil traders and other stakeholders over the supply gap.

 

But the development has not yet impacted on the market as Vanguard’s survey of the oil markets around the world showed that the price of Nigeria’s Bonny Light was still a little below $80 per barrel in the market yesterday.

 

The price of organisation of Petroleum Exporting countries, OPEC basket of 14 crudes stood at $76.75 a barrel, compared with $75.18 the previous day, according to OPEC Secretariat calculations.

 

Investigation showed that despite increased government romance with stakeholders in the Niger Delta, the region has continued to record pockets of pipeline vandalism, meaning that oil operations may still under threats of disruptions.

 

In its latest report released about two weeks ago, Shell stated that: “Security remains a high priority due to continued crude oil theft and criminality in parts of the Niger Delta. Illegal refining and third-party interference are the main sources of pollution in the Niger Delta today.

 

“Third party interference caused close to 90% of the number of spills of more than 100 kilograms from The Shell Petroleum Development Company of Nigeria Limited operated Joint Venture (SPDC JV) pipelines in 2017.

 

‘’Security in parts of the Niger Delta remains a major concern with persisting incidents of criminality, kidnapping and vandalism as well as onshore and offshore piracy. Although there has been no damage to key oil and gas infrastructure caused by militant activity since November 2016, the security situation remains volatile in this region of the country.”

 

 

Advertisements

Categories: Business