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Export of Nigeria’s crude suffered the most decline in a year last month as major crude grades fell to 1.51m barrels per day (b/d), from 1.55m b/d in May largely due to disruption to Shell’s Bonny Terminal.
Vessel tracking data compiled by Bloomberg shows that major crude grades including Akpo, Agbami, Bonga, Erha, Escravos, Forcados and Qua Iboe saw huge declines in production.
This decline is a fallout of the May 17 force majeure on exports of Bonny Light crude and a similar disruption to the Forcados terminal when it was shut on May 25 following discovery of leaks on the Trans Ramos Pipeline in the swamps of the western Niger Delta.
Oil companies often declare force majeure, a legal clause that allows cancel or delay deliveries due to unforeseen circumstances, in situations where contract obligations may not be met.
The biggest decline came from Bonny Light and Brass grades which lost 45,000 b/d from the 132,000 b/d recorded in May and 56,000 b/d from supplies in May respectively.
Agbami crude grade export fell from 220,000 to 197,000 b/d, Erha lost 3,000 b/d to from 95,000 b/d in May, Escravos lost 21,000 b/d fall from 169,000 b/d, Forecados declined from 195,000 b/d to 155,000 b/d while Qua Iboe saw supply slip from 253,000 b/d to 184,000 b/d.
Akpo condensate shipments fell to 95k b/d from 123k b/d in May. As a result of these, combined crude and condensate exports fell to 1.603m b/d from 1.677million.
Ayodele Oni, energy lawyer at Bloomfield law firm says the disruptions may not have material effect on Nigeria’s crude revenue due to expected return to full capacity in the short term.
Oni told BusinessDay by phone that there are positive things happening including arrangements by the Nigerian National Petroleum Corporation (NNPC) and some oil companies to replace wells producing below their capacity. This is expected to help grow production.
The NNPC in a release on Sunday said it had finalised a crude oil production financing deal it negotiated with Schlumberger for the Anyalu and Madu oil fields under Oil Mining Licences (OMLs) 83 and OML 85, offshore Nigeria.
It said approval was given over the weekend in London with the execution of the final contractual agreement between it and the company under a joint venture agreement it has with First E&P.
Under the agreement, the NNPC said Schlumberger would provide $724.14 million out of the required project cost of $1.082 billion while the balance of $358.79 million would be funded with cash flows generated by the project.
According to the NNPC, the Anyala and Madu fields were projected to have 193 million barrels of crude oil and 0.637 trillion cubic feet of proven gas reserves with production plateau of 50, 000 barrels of oil per day (bd) and 120 million standard cubic feet of gas per day (mmscuf/d).
