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Exxon Shocks As Oil Reserves Drop By A Third

Exxon Shocks As Oil Reserves Drop By A Third

Exxon slashed its oil reserves…

Shell Declares Force Majeure On Bonny Light Shipments

The Nigerian subsidiary of Shell has declared force majeure on Bonny Light exports because of the shutdown of the Nembe Creek pipeline, which has led to the accumulation of lots of unsold crude.

The Nembe Creek transports 150,000 bpd of Bonny Light to the Forcados terminal that Shell operates. The reason for the shutdown of the pipeline remains a mystery.

After yesterday Brent breached US$80 for the first time since November 2014, it retreated slightly, but the news of the Bonny Light force majeure could lift the benchmark once again. Bonny Light is a popular light grade that accounts for a substantial part of Nigeria’s oil revenues.

Reuters yesterday quoted traders as saying Bonny Light shipments next month were likely to average 195,000 bpd, but were already being delayed by a few days to a week. These delays may also be related to the shutdown of another large pipeline, the Trans-Forcados, which takes Forcados crude to the coast.

Forcados, which can transport between 200,000 and 240,000 barrels of crude per day, was shut down earlier this week after a leak. Traders said that at least half of the 60 cargoes available at the Forcados terminal have still not been sold because of higher shipments of U.S. shale oil to Europe and slower demand in China and India.

Related: How To Mitigate The Risk Of Peak Oil Demand

Meanwhile, earlier this week the NNPC said it had awarded two-year equity crude oil contracts to 50 local and international companies out of 254 bidders. The winners will buy more than 700,000 barrels of Nigerian crude daily, the company said.

Nigeria’s oil production, including condensates, increased to 2.07 million bpd in April from 2.02 million bpd in March, and rose by 11 percent from April 2017.

Since militant violence in the Niger Delta abated in the second half of last year, Nigeria has gradually ramped up production, but its oil and condensate output dipped in March due to what officials attributed to illegal tapping of pipelines in the oil-producing region.

By Irina Slav for Oilprice.com

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  • petergrt on May 18 2018 said:
    "Traders said that at least half of the 60 cargoes available at the Forcados terminal have still not been sold because of higher shipments of U.S. shale oil to Europe and slower demand in China and India."

    But oil is going to go up because . . . . .

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