- Nigeria’s Forcados Oil Comes Back in Fresh Blow to OPEC Curbs
Royal Dutch Shell Plc lifted restrictions on exports of a key Nigerian crude oil, 472 days after imposing them following militant attacks. The extra flows alone amount to about 20 percent of the supply OPEC has pledged to cut from world markets.
Europe’s biggest oil company ended a force majeure of Forcados crude oil shipments at 4 p.m. on Tuesday, a spokesman said. The measure, which allows companies to miss contractual obligations, was imposed on Feb. 21 last year. Shipments this month will average about 250,000 barrels a day, according to a loading program obtained by Bloomberg.
Nigeria is adding barrels to the market just as other members of the Organization of Petroleum Exporting Countries are trying to remove them in a bid to bolster prices. The producer club said on May 25 that it will keep its collective output restricted by 1.2 million barrels a day until the end of the first quarter next year. As well as Nigeria, flows from Libya are also jumping. Both countries were exempted from the curbs because of domestic conflicts.
“The market is already drowning” in similar types of crude to the Forcados grade, said Ehsan Ul-Haq, an oil analyst at KBC Advanced Technologies. The return of the grade will only add to that, he said.
The return of Forcados will add more than 10 percent to the country’s output, lifting it toward the 2 million barrels a day mark. It also reinstates the crude as Nigeria’s second-largest export grade, after Exxon Mobil Corp.’s Qua Iboe.
Shell’s Nigerian unit declared the force majeure after the Niger Delta Avengers, a militant group, attacked the subsea export line. The NDA claimed another attack on the pipeline in June, and then again in early November, part of a spate of sabotage that pushed the country’s production to the lowest in almost three decades last year and cost it billions of dollars.