Following the incessant production outages and
force majeure declared on exports of some
grades of Nigerian crude oil, which have created
supply uncertainty to the major buyers of
Nigeria’s crude oil, mostly foreign refineries, the
refineries from India to the United States are
backing away from buying Nigerian oil and
turning to Iran and other Middle East countries for
sustainable crude oil supply.
The uncertainty about deliveries of Nigerian crude
to the foreign buyers due to supply disruptions
has heightened in recent months as the country
squares up to the new militant group in the Niger
Delta, the Niger Delta Avengers (NDA), which
wednesday claimed it had struck Chevron-
operated RMP 20 Well at Didi community in
Egbema, Warri North Local Government area of
Delta State.
Force majeure is a legal clause that allows crude
oil producers to stop exports and cancel deliveries
to customers without breaching contracts by
citing unforeseen circumstances.
Shell, ExxonMobil and Nigerian Agip Oil Company
(NAOC) have invoked this clause in recent weeks
to avoid contractual obligations to customers
who were denied supplies.
The lack of guarantee of steady supply of Nigerian
crude by the IOCs has fuelled the reluctance of
foreign buyers to buy Nigerian crude.
It is feared that with this development, the
country may risk losing some of its customers to
other rival producers, particularly Iran.
So far, crude oil supply shortfalls like those
experienced in Nigeria and Libya, have been met
by rising output in the Middle East, especially Iran,
which has ramped up output since the end of
international sanctions against the country in
January.
Nigeria, which ranked as Africa’s top producer,
recently lost its position to Angola after the
country’s production dropped from 2.2 million
barrels per day to less than 1.5 million barrels per
day following production disruptions caused by
the recent upsurge in militant attacks on oil and
gas facilities.
The NDA has staged a number of attacks on oil
installations belonging to Shell, ENI and Chevron,
pushing output in Nigeria down past 20-year
lows last month.
Though some oil facilities have clawed back
output, the Avenger’s attacks have continued and
the group has vowed to bring Nigerian
production to “zero”.
While Shell declared force majeure on its exports
of Bonny Light and Forcados streams, Agip
declared force majeure on exports of Brass River,
ExxonMobil had also declared force majeure on
exports of Qua Iboe due to rig accident, which
damaged a pipeline.
Reuters reported that India’s HPCL was forced last
month to cancel a vessel it chartered to carry 2
million barrels of West African crude due to the
Qua Iboe force majeure.
India’s state-run Indian Oil Corp. Ltd – a major
buyer of Nigerian grades over the past year – has
stated in its recent tenders that it would not take
grades under force majeure.
Indonesia’s Pertamina, another frequent buyer,
also chose not to buy Nigerian grades in its recent
tenders, favouring Congolese Coco, Angolan
Girassol and Saharan Blend from Algeria instead.
Traders said Pertamina had shifted its preferences
since the violence and uncertainty escalated,
although Daniel Purba, Senior Vice-President of
ISC Pertamina, told Reuters by text message that
Pertamina is “monitoring” Nigeria, but “currently
it’s still not affecting crude purchasing”.
ExxonMobil, which declared force majeure on
Qua Iboe in May due to an accident, lifted the
declaration last week, but the unpredictability is
too much for some buyers.
The reduced demand means Nigeria is not
benefiting as much as others from a rebound in
Brent crude prices, which is partly driven by its
own oil outages.
Even refineries on the US East Coast, which have
been on a buying spree for Nigerian crude in
recent months that averaged 240,000 barrels per
day (bpd) in April and May, according to Reuters
shipping data, are beginning to turn away.
As a result, differentials to dated Brent for Qua
Iboe, Bonny Light and other grades are under
downward pressure. There are several unsold
cargoes for June loading, even with more than
half a million barrels of production missing.
Militants Blast Chevron’s Well in Warri
Meanwhile, Chevron-operated RMP 20 Well at Didi
community in Egbema, Warri North Local
Government area of Delta State was the latest
target of the Niger Delta militants’ attack yesterday
as it was blasted, causing further disruptions to
the nation’s oil production which had dipped
from 2.2m bpd to 1.6m bpd in the last few
weeks.
Although there was no official confirmation
yesterday, the Niger Delta Avengers (NDA) in a
series of tweets claimed responsibility for the
blast.
The well, according to the tweets, is 20 metres
away from Dibi Flow Station in Warri North Local
Government Area of the state.
“At 1:00am today, the @Niger Delta Avengers blew up
Well RMP 20 belonging to Chevron located 20
meters away from Dibi flow Stattion in Warri
North LGA,” it said.
The blast obviously signifies the group’s rejection
of the federal government’s olive branch by its
setting up of a negotiation committee headed by
the National Security Adviser (NSA) Babagana
Munguno, as well as the standing down order to
the military in the Niger Delta region yesterday.
“This is to the general public: We’re not
negotiating with any committee. If the federal
government is discussing with any group,
they’re doing that on their own,” the group
warned.
The last economic sabotage embarked upon by
the group was last Friday’s destruction of Shell’s
48-inch Forcados underbelly export terminal
pipeline located at Ogulagha and Odimodi
communities in Burutu Local Government area of
the state.
The Nigerian Navy Ship (NNS Delta) Warri had on
Tuesday said it arrested a suspected top
Commander of the NDA.
The suspect, whose name was not released, was
alleged to be behind the recent series of attacks
on oil and gas installations in the Niger Delta,
particularly in Delta State.
Source: http://thisdaylive.com/index.php/2016/06/09/ndelta-militants-strike-chevron-again-as-nigeria-risks-losing-oil-market-to-iran

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