Nigerian Oil-Export Terminal Back On Line
July 07 2016 - 11:10AM
Dow Jones News
Crude-oil exports can resume from a Nigerian terminal capable of
exporting 200,000 barrels a day after two months of outages there
had contributed to a petroleum-price rally, Royal Dutch Shell PLC
said on Thursday.
Shell declined to say exactly how much production would begin to
flow through its Bonny Light terminal in the Niger Delta, which was
taken off line in early May after a leak on the Shell-operated
Trans-Niger pipeline. The leak was caused after suspected oil
thieves damaged a pipeline.
The Anglo-Dutch company said only that conditions had improved
enough to lift force majeure, a legal declaration that exempts the
company from fulfilling contractual obligations due to
circumstances outside its control. The pipeline was reopened on
Monday and exports began on Thursday, Shell said.
The outage was among the most significant to plague Nigeria's
oil industry in recent months and added to global interruptions in
output from Canada to Kuwait that helped send crude prices into a
rally. Brent crude, the international benchmark, traded up 14% to
nearly $52 a barrel in the month after Nigeria's oil outages began,
though it has since fallen. Brent was trading at $49.27 a barrel on
Thursday afternoon in London.
Nigerian supply hit multiyear lows at the height of an
unprecedented series of attacks by militants, with production cut
to around one million barrels a day. The country is capable of
producing about 1.85 million barrels a day, according to the
International Energy Agency.
A reported cease-fire between militant groups and the Nigerian
government resulted in production increasing in Nigeria. However, a
militant group defied the cease-fire over the weekend by carrying
out further attacks on the country's oil infrastructure,
reaffirming analyst concerns that Nigeria remains a serious supply
risk.
Elsewhere in Nigeria, Shell's force majeure on exports at the
Forcados terminal is still in place, which was also caused by a
pipeline leak. Forcados can export about 400,000 barrels a day.
Several other major oil companies, such as Eni and Chevron, have
been affected by attacks from the Niger Delta Avengers. Exports
have been affected from a number of terminals, but no other company
currently has a force majeure in place.
Write to Miriam Malek at Miriam.Malek@wsj.com
(END) Dow Jones Newswires
July 07, 2016 10:55 ET (14:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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