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By Chika Amanze-Nwachuku, with agency reports
Oil giant, Shell, said it expected to lift a force majeure on exports of Forcados and Bonny Light crude oil grades by the end of November, Reuters quoted Shell’s vice-president for production and exploration in sub-Saharan Africa, Ian Craig, to have said.
This came as the oil giant Thurrsday said its output in Nigeria has been cut by about 20,000 barrels per day for the fourth quarter due to flooding worsening the company’s production losses in Africa’s top exporter.
“We are hopeful it will be lifted by the end of November on both the export terminals,” Craig, said in an interview with Reuters.
The Shell Petroleum Development Company (SPDC) had declared a force majeure on exports of Forcados and Bonny Light crude oil grades owing to a recent fire on the Bomu-Bonny Trunkline, damage to the pipeline and flooding that affected its Bonny operations.
“The problem that we are having is these repeated incidents. So you fix one, you go for a period and then you have another one. I’m pretty sure we’ll get out of this one quickly, the difficulty is how long before the next incident,” the Shell official said on the sidelines of an African oil conference organised by Global Pacific & Partners.
Separately, Shell said its Nigerian output had been cut by about 20,000 barrels per day in the fourth quarter due to flooding in the Niger Delta region.
Shell had in September, shut its Bonny pipeline and deferred 150,000 bpd after a third party vessel suspected to have been involved in crude theft caught fire, the Bomu-Bonny Trunkline conveys crude oil to Bonny Terminal.
Shell had confirmed that flooding had affected its Bonny operations, while attacks on the pipelines of its local subsidiary caused its major problems.
The company also said it was working to repair the pipelines, but gave no estimate as to when the lines would be running at capacity again.
The country has experienced its worst flooding in five decades this year, with the River Niger bursting its banks in September.
The flooding has reduced supplies from Nigeria by more than a fifth by some estimates, helping to support global prices.
Speaking on a conference call to discuss Shell’s third-quarter earnings, Shell’s Chief Financial Officer, Simon Henry, said the company was working to resume output that had been affected by the floods in the region.
“The impact in the fourth quarter looks at least 20,000 barrels per day compared to the third quarter.
“We are not yet back up and running, so that impact could increase.
“We are doing everything we can to bring operations back as reliably and safely as we can,” he said. The earnings season this week has underlined the challenges faced by Shell and rivals like BP Plc in boosting output.
Shell said yesterday that Nigerian losses led in part to a fall in its third-quarter global liquids production of five
per cent.
Other companies such as Total of France had to reduce output in the country because of the floods, which Federal Government officials estimated at one point cut at least a fifth, or 500,000 bpd, of the country’s output.
In addition to the drop in output caused by flooding, Shell’s Nigerian venture on October 19 declared force majeure on exports of Bonny and Forcados crudes, citing damage to pipelines caused by oil theft.
On September 30, Shell said its Nigerian unit closed the Bonny pipeline which sends crude to the Bonny terminal and stopped 150,000 bpd of production after oil thieves caused a fire.
An executive Thursday said the company expected to lift force majeure on both crude grades by the end of November.