Contrary to trending news that loss in crude oil in the month of March were from oil installations vandalism, intelligence secured from credible sources at the Nigerian National Petroleum Corporation (NNPC) showed that they were caused essentially by challenges like force majeure, poor pipeline integrity, leaks or turn around maintenance.
A force majeure is a standard clause that exempts the parties to a contract from fulfilling their contractual obligations for causes that cannot be anticipated and/or are beyond their control.
About 25 million barrels of crude oil were shut-in at four production terminals within the month of March as a result of various challenges at the terminals.
The losses according to findings stemmed from the Forcados, Qua Iboe, Bonny and Bonga oil production terminals which shut-in about 25 millions of crude.
Additional discoveries showed that the challenges were the key inhibiting factors that dragged crude oil production performance in March and other months.
Nigeria had been reducing since January this year, leading to a cumulative loss of about N131.8bn in less than three months.
Industry data which came lately from NNPC indicated that the force majeure declared at the Forcados terminal since February 21, 2016 was still in place up till March this year, while about 314,687 barrels per day of crude was shut-in in March 2017 due to the continuous shutdown of the 48-inch crude export line.
About 9,755,297 barrels of crude was shut-in at the Forcados terminal in March 2017 alone as a result of the force majeure at the terminal.
NNPC noted on the Oua Iboe terminal, that “Some production wells remained shut-in since February 2017 at Ubit 131J for gas curtailment and Usari FC wells for QIT Tank top management due to some pipeline integrity issues.”
It also stated that an average of 220,000bpd was shut-in throughout the month of March 2017 at the terminal. This means that an average of about 6,820,000 barrels was shut-in at the terminal in the month.
In the case of Bonny terminal, NNPC disclosed that the Trans Niger Pipeline was shut down on March 15, 2017 as a result of a leak at the Oloma axis, adding that this resulted in a shut-in of about 129,255bpd for about seven days.
