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ExxonMobil has announced a force majeure on Nigeria’s Qua Iboe crude oil production due to a fire incident that reportedly killed a worker and injured others.
This was disclosed in a statement by a spokesman of the company, Reuters reports.
Qua Iboe is Nigeria’s largest export grade and popular among global refiners, with India, the US, Canada, Italy, Spain, Indonesia, and the Netherlands being key buyers.
ExxonMobil did not reveal how much was lost to the fire incident at the Qua Iboe Terminal, and also did not indicate when exactly production will resume. However, the oil firm said that it never anticipated an impact on its operations at Qua Iboe.
An insider revealed to Reuters that the company expects operations to resume at the terminal in January 2021.
Production of Qua Iboe key grade has ranged between 180,000-220,000 bpd this year, according to S&P Global Platts estimates.
READ ALSO: 2020 IN REVIEW: Major events that shaped Nigeria’s energy sector in 2020
Differentials for Qua Iboe, however, have weakened slightly after Asian buying activity slowed down in the past week, traders said.
“Indeed things [differentials] seem to be easing … whether the qua accident catches anybody out unclear,” said a West African crude trader.
Qua Iboe was assessed at a premium of $0.10/b to Dated Brent on Dec. 11, a fall of 40 cents in the past two weeks, data from S&P Global Platts showed. Similar values were seen on Dec. 14, traders said.
Qua Iboe is a light sweet crude, which has a gravity of 36 API and sulfur content of 0.13 percent. The crude, produced from fields 20-40 miles off the coast of southeast Nigeria is brought to shore at the Qua Iboe terminal via a seabed pipeline system.
ExxonMobil holds a 40-percent interest in the field’s production, with state-owned Nigerian National Petroleum Corporation (NNPC) holding the rest.
Nigeria is expecting an oil revenue of N2.01 trillion based on a production of 1.86 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day) at a crude price of $40 per barrel in 2021.
Nigeria needs a combination of higher oil prices and favourable OPEC cut to fund its N13.083 trillion 2021 budget and survive its economic recession which is the worst in recent history.
