Nigeria’s crude oil output is expected to rise by 226,000 barrels per day, as the Shell Petroleum Development Company (SPDC) has lifted the force majeure declared on exports of Bonny Light, the country’s reference crude oil grade.
This follows the completion of repairs of the Nembe Creek Trunk Line (NCTL) by operator, Aiteo Eastern E&P Company Limited.
The development was a boost to efforts on the recovery of Nigeria’s crude production heavily impacted by militancy in the Niger Delta, a situation that prompted the Organisation of Petroleum Exporting Countries (OPEC) to exempt the country from the production cuts, which the cartel has extended until March 2018.
This is coming as crude oil prices rose to a two-week high Thursday, extending a rally into a sixth straight session after a decline in weekly U.S. production eased concerns about deepening oversupply.
The six-day bull-run is the longest since April, which ended with oil price hovering around $51 per barrel.
With the lifting of the force majeure on Bonny Light, Nigeria’s crude export will exceed 2 million barrels per day, as the export of the Bonny grade is set to reach 226,000 barrels per day in August, up from 164,000 bpd in July, according to the loading schedules.
A Shell spokesman, Mr. Bamidele Odugbesan, confirmed on Thursday that “the force majeure on Bonny Light exports was lifted effective 12:00hrs (Nigerian time) on Wednesday, June 28, 2017 after the repair of the sabotage leak”.
The 600,000 barrels per day capacity, 100-kilometre NCTL built by SPDC and commissioned in 2010, feeds the Bonny export terminal in Rivers State.
SPDC sold the pipeline and Oil Mining Lease (OML) 29 to Aiteo in 2015 as part of its divestment programme for onshore assets in the Niger Delta.
NCTL and the Trans-Niger Pipeline (TNP) remain the two major pipelines used by SPDC and some other producing companies to evacuate crude from the eastern Niger Delta to the export terminal.
Before the downward slide in prices, oil had traded at a 2017 peak of $55 per barrel in 2017. Prices recently slipped to the lowest in ten months but have since rebounded more than seven per cent, stretching their bull-run to the longest since April.
Reuters reported that the global benchmark, Brent crude futures were up 35 cents Thursday at $47.66 a barrel, having touched a two-week high of $47.83 earlier in the session. U.S. West Texas Intermediate (WTI) crude was up 33 cents at $45.07 a barrel, after registering an intraday high of $45.24, also a two-week peak.
U.S. government data showed on Wednesday that domestic crude production dropped by 100,000 barrels per day (bpd) to 9.3 million bpd last week, the steepest weekly fall since July 2016.