Shell has resumed exports from its Forcados oil terminal in Nigeria after a months-long pause, Shell Nigeria said late on Thursday night.
Oil exports resumed on October 20, according to the oil company. Before production resumed, the last crude oil exports from the Forcados terminal took place on July 9, according to S&P Platts. Oil flows to the terminal were halted on July 17 due to a leak in a subsea mooring line—a common target for oil thieves.
The resumption of oil flowing into Forcados for export could lead to a sharp increase in Nigeria’s oil production and exports, which have been languishing for years on the back of leaks and underinvestment due to theft.
Higher oil prices, along with increasing a country’s revenue stream, have one unfortunate side effect—it serves as an increased temptation for oil thieves.
Nigeria’s crude oil production slumped to 1.578 million bpd in 2020, according to OPEC’s Monthly Oil Market Report, from 1.786 million bpd in 2019, only to fall further in 2021 to 1.372 million bpd. By September 2022, Nigeria’s production sagged to 1.087 million bpd. The resumption of the Forcados terminal could increase Nigeria’s production by as much as a half a million barrels per day.
Nigeria’s key export grade Forcados was under force majeure in December as well, as a stranded barge prevented tanker loadings.
Nigeria has been unable to take much advantage of the higher oil price environment like other oil-rich countries, with oil revenues coming in 61% below target during the first four months of 2022, according to Nigeria’s Budget Office. Nigeria’s oil industry continues to be plagued by oil theft, pipeline vandalism, and high gasoline prices, which Nigeria subsidizes. Nigeria imports nearly all the gasoline it consumes.
By Julianne Geiger for Oilprice.com
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