London, UK | – Mobil Producing Nigeria Unlimited, a subsidiary of ExxonMobil, will resume shipment of Qua Iboe crude, Nigeria’s largest grade of crude oil in October; three months after the company had declared force majeure on the exports of the grade.
This is coming as oil prices slumped three per cent Tuesday following another gloomy prediction by the International Energy Agency (IEA) on demand growth that suggested that oversupply in the oil market might persist for longer than anticipated.
In July, Exxon declared force majeure on Nigeria’s largest export facility, Qua Iboe, after having observed a “system anomaly” during a routine inspection of the loading facility. At the time, Exxon said it was trying to restore loading at the terminal to its normal level, but could not give a specific timeline, noting the damage was not the result of militant attacks.
And last month Exxon started looking for another route to export the crude it pumps in the Niger Delta to replace its main pipeline for moving Qua Iboe crude. Back then, company representatives said that repairs at the Qua Iboe facility were advancing.
Now, Exxon is offering a Qua Iboe cargo for loading between October 8 and 16, at a price of US$1.80 above dated Brent, Reuters reports, noting that it’s not yet clear whether the damage has already been fixed or whether Exxon expects it to be fixed by the loading timetable in October.
If Exxon resumes Qua Iboe exports, it would help bring online some of the crude that has been taken offline in recent months due to attacks by militant groups. The most notorious of them, the Niger Delta Avengers (NDA), have halted hostilities, but observers do not expect a lasting ceasefire because there are many other militant groups that attack oil infrastructure.
Also on the positive note for Nigeria’s oil, Shell lifted its force majeure on Bonny Light crude exports last week. The Nembe Creek Trunk Line was repaired and reopened, allowing Shell to resume exports of its oil, nearly a month after declaring force majeure. Nembe Creek is one of a handful of key pipelines that helps Nigeria brings its oil to the coast for export. The cause of the August outage was not reported on – the pipeline’s operator, Aiteo, said it was from a leak but did not disclose the cause.