Shell Lifts FM, as Nigeria Supplies Ease, Oil Dips

Shell has confirmed that its force majeure (FM) at the Bonny Light crude export terminal in southern Nigeria was lifted October 19 at midday local time.

Shell imposed the FM midday July 13, 2017 after shutdown of the Nembe Creek Trunk Line (NCTL) by operator Aiteo.

The lifting of a 17-month FM on Forcados exports in June 2017, and this October 19 lifting of an FM at Bonny Light, mean it's believed there are no FMs in respect of major oil or gas operations in Nigeria currently in place. Bonny Light was also subject to FM during August-September 2016.

Militant attacks on Nigerian facilities forced oil production "down to thirty-year lows" in 3Q2016 of only 1.25mn b/d, and just 1.15mn b/d in August 2016. Now though the IEA puts 3Q2017 Nigerian crude supply at 1.653mn b/d, with the average in August and September this year at 1.66mn b/d. 

Nigeria LNG, jointly owned by state NNPC, Shell, Total and Eni, was subject to a FM on its feed gas supply from August 8 to September 7 2016.

The rise in Nigerian crude exports was one of the factors behind the Brent crude oil price softening almost $1/barrel, according to analyst Malcolm Graham-Wood in his daily blog October 20. "A combination of profit taking and a lessening of geopolitical risk in Kurdistan... took the heat out of the market. That was added to by Shell lifting the FM on Bonny Light crude exports after pipeline repairs were completed.

"The good news that was seemingly overlooked was also mentioned here yesterday, over at Opec, secretary-general Barkindo said that he was ‘engaging support’ to extend the existing cuts," he said.

Mark Smedley

Update: Unplanned global supply disruptions fell to 1.6mn b/d in September, their lowest since January 2012, said the US Energy Information Adminstration in a briefing note October 23. It noted how such disruptions had fallen by more than 1mn b/d over the past six months as outages in Libya, Nigeria and Iraq abated.