Oil companies operating in Nigeria Eni, the parent company of Nigerian Agip Oil Company (NAOC) and Shell on Monday declared a Force Majeure on expected oil output at its Brass terminal in Yenagoa.
The declaration means a shortfall of 25,000 barrels of crude oil and 13 million standard cubic metres of gas per day from the terminal.
A Force Majeure is a legal clause in contracts which absolves firms from legal liabilities due to circumstances beyond their control.
“An incident occurred on the Ogoda/Brass 24 oil line at Okparatubo in Nembe Local Government Area of Bayelsa. The incident was caused by a blast, consequently causing a spill.
“All wells connected to that pipeline were immediately shut whilst river booms and containment barges were mobilised to reduce the impact of the spill.
Shell Petroleum Development Company, the local unit of Royal Dutch Shell, on Monday said it declared force majeure on Bonny Light oil export programme beginning from March 3, citing a decline in flows to the export terminal.
On the same day, Italian energy giant Eni also declared the same measure on exports of Brass River crude oil, triggered by a pipeline explosion in Bayelsa State. Force majeure legally allows a company not to meet contractual obligations for reasons that are out of its control.
The twin occurrences is likely further pressure a market reeling from the weighty implications of Russian occupation of Ukraine by complicating supply woes.
The two Nigerian grades – Bonny Light and Brass River – were part of a shipment programme of 170,000 barrels of crude per day (bpd) for April even though they have seen a continuous for years, Bloomberg said, citing loading plans.
Eni stated it has pared crude exports from Brass Export terminal by around 25,000 bpd, noting that the explosion was the second blast after an explosion on February 28 at its Obama flow station caused a drop in output of 5,000 bpd.
kMarket observers are weighing the uncertainty around the fate of Russian oil following the country’s occupation of Ukraine, with a number of energy firms ending patronage of new cargoes from Moscow and some countries ordering embargo on importation of petroleum from Russia.
The latest developments could deal a blow on Nigeria
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