Royal Dutch Shell on Wednesday announced that it has declared “force majeure” on exports of Nigerian Forcados crude oil after a malfunctioning barge obstructed tanker path.
According to Reuters, Shell Petroleum Development Company in a statement said the action came into effect on Monday at 12:00 mid-day.
“Efforts were underway to restore access,” it added.
Force majeure is a situation that makes the performance of a contractual obligation impossible for a party due to an event beyond their control.
The oil and gas sector accounts for almost 90 per cent of Nigeria’s foreign exchange supply and approximately 10 per cent of its GDP, while exportation of petroleum products account for roughly 86 per cent of revenue needed to fund the country’s annual budget.
Forcados crude oil is one of Nigeria’s unique crude blend with an average turnover of about 200,000 barrels per day.
The stoppage of activities is coming a month after the SPDC said it was restoring flow from its Bonny island facility.
Nigeria had in November regained the top spot of crude production in Africa, with an average production of 1.27 million barrels per day.
Halt in crude shipments from Nigeria’s Forcados could further exacerbate existing shortages that have affected crude oil exportation in recent months amidst COVID-19 variant fears.
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