July 28, 2016
ALERT | Nigeria Loses N356.6bn In 5 Months Over Forcados Shutdown
Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had said earlier this month that repairs would be completed by the end of July, it is uncertain when the pipeline would come back on stream.
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.
Punch reports that the International Energy Agency had in April estimated that Nigeria could lose an estimated $1bn (N197bn) in revenue by May, when repairs of the terminal is expected to be done.
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 $1bn 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 N246.4bn as of June 19 and N110.2bn from June 20 to July 27 (using $290/$).
NNPC also said the deficit and low revenue recorded by its exploration and production subsidiary, Nigerian Petroleum Development Company, from February to April, was due to production shut-in, resulting in loss of entire NPDC’s revenue from crude oil sales of about N20bn occasioned by vandalism of Forcados export line.