Forcados Shutdown: Nigeria Loses N356.6bn

Five months after it was
attacked and shut down, Shell Petroleum Development Company of Nigeria’s Forcados export terminal remains offline, causing the country a loss of about $1.6billion (N356.6billion) in revenue.
It is still uncertain when the pipeline would come back on stream, although the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had assured that repairs would be completed by the end of July.
In February 21, Shell declared force majeure – a legal clause that allows it to stop shipments without breaching contracts – a week after militants blew up a pipeline feeding the Forcados export terminal, knocking out at least 250,000 barrels per day.
The International Energy Agency had in April estimated that Nigeria could lose an estimated $1billion (N197billion) in revenue by May, when repairs of the Forcados terminal was expected to be completed.
The IEA said, “The Forcados terminal in Delta State, one of Nigeria’s biggest terminals, was scheduled to load 250,000 barrels of crude per day. At $40 per barrel, Nigeria could stand to lose an estimated $1billion between February, when force majeure was declared, and May, when repairs are expected to be completed.”
At an average oil price of $40 and exchange rate of N197 to the dollar, the country lost at least N246.4billion as of June 19 and N110.2billion from June 20 to July 27 (using $290/$).
The Nigerian National Petroleum Corporation (NNPC) had said the deficit and low revenue recorded by its exploration and production subsidiary, Nigerian Petroleum Development Company (NPDC), from February to April, was due to production shut-in, resulting in loss of entire NPDC’s revenue from crude oil sales of about N20billion occasioned by vandalism of Forcados export line.
The corporation said recent upsurge in vandalism had negatively impacted on the Nigerian crude oil production output, losing its African top crude oil producer to Angola.
It said, “About 380,000barrels per day remained shut in due to vandalism of the 48-inch subsea export line on February 15, 2016.