FG, OIL FIRMS LOSE $674M TO PIPELINE SHUTDOWNS
Originally published on June 29th, 2018
The shutdown of two pipelines since last month may have caused oil firms and the nation a huge loss of revenue estimated at $674.25m.
Shell Petroleum Development Company of Nigeria Limited, on May 17, 2018, said it had declared force majeure on exports of Bonny Light crude. The SPDC, the Nigerian subsidiary of Royal Dutch Shell, said the shutdown of the Nembe Creek Trunk Line had prompted the force majeure. Exports of Bonny Light were expected to run at around 195,000 barrels per day this month, according to Reuters.
On May 25, the nation’s crude oil exports suffered another setback as the SPDC shut down production following the discovery of leaks on its Trans Ramos Pipeline in the swamps of western Niger Delta. The pipeline, which supplies crude oil to the Forcados export terminal, has a capacity of around 100,000 barrels per day.
Using an average oil price of $75 per barrel since Brent crude, against which Nigerian oil is priced, has been trading around $70 and $80 in recent months, the decline of 295,000 bpd in the nation’s oil exports means a loss of $674.25m in a month.