Nigeria loses 400,000 barrels per day as Shell suspends Forcadors repairs

The decision of Shell Petroleum Development Corporation to suspend repairs of its Forcados Oil terminals bombed by Niger Delta earlier in February may be costing Nigeria about 400,000 barrels of oil per day.

Shell’s resignation over the disabled pipeline that conveyed Forcados grade of crude oil to the over 400,000 barrels per day, suggests a new level of insecurity as a wave of violence hits the oil-rich Niger Delta, leaving production at its lowest level in nearly three decades.

Chief Financial Officer (CFO) of Shell, Simon Henry said the company had to withdraw repair crews last week after a second attack against the 48-inch Forcados export pipeline that links onshore storage tanks with an offshore port.

“We cannot operate or repair if our people are threatened,” Henry said in an interview at Shell’s annual capital markets day yesterday.

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National Daily also gathered that recovery of 40 per cent of the nation’s gas supply to the power sector will also remain inaccessible because of the damaged caused the pipelines. The damage of Shell’s Forcados export terminal pipeline and the vandalism of the Lagos Escravos pipeline in February, has resulted in the constraint of 3,132 megawatts (MW).

The terminal was initially blown up in February and the company mobilised to effect it repairs which was expected to have been completed by end of May. Unfortunately  before  this  could be completed another devastating attack was carried out  by  the  militants  on  the  same facilities thereby endangering  the lives of the  workers.

The Forcados, Brass River and Bonny Light export terminals in Nigeria are under force majeure, a legal term that allows companies to walk away from export commitments after several attacks. The Escravos terminal is delaying shipments after attacks against facilities operated by Chevron Corp., while a force majeure for Quao Iboe was lifted last week after Exxon Mobil Corp. carried out repairs.

The militants, which back in 2009 were loosely grouped around the Movement for the Emancipation of the Niger Delta, now call themselves the Niger Delta Avengers. They claim to represent the people of the oil-rich region, portraying themselves as freedom fighters rather than rent seekers.

The Avengers aim to bring production by foreign oil companies in Nigeria to “zero,” according to a statement on a recently created website.