Oil Tankers Head to Key Nigeria Port as Militant Risk Endures

LAGOS, Capital Markets in Africa: Oil tankers able to collect 6 million barrels of crude are heading to the biggest export terminal in Nigeria, where shipments are about to resume at a time when militants continue to pose a threat to the nation’s energy infrastructure.

The Suezmax Ottoman Nobility is set to arrive at the Qua Iboe terminal on Tuesday, the first of five vessels due to load Nigeria’s largest export crude grade since terminal operator Exxon Mobil Corp. halted shipments in July. Four others are scheduled to arrive by Oct. 15 and if they collect standard cargoes, the ships would revive loading rates of the grade close to their average for last year.

Shipments of Qua Iboe and Forcados, another major Nigerian grade, are set to resume this month after being suspended earlier this year amid escalating militancy, cargo loading programs show. Both grades remain under force majeure, a legal term that allows companies to halt exports without breaching contractual obligations.

Attacks on infrastructure in Nigeria, Africa’s largest oil producer under normal market conditions, resulted in the nation’s crude loadings falling to 1.38 million barrels a day in June, the lowest since Bloomberg began compiling loading data in November 2007. The disruptions, combined with a two-year slump in oil prices, have hampered growth in an economy that’s forecast to shrink this year for the first time since 1991.

Export Threat
The resumption of Qua Iboe and Forcados shipments would allow Nigeria’s crude exports to rise to about 1.85 million barrels a day next month, the highest since March, according to the oil-loading programs.

Just as the two grades are set to return, so has the threat of further disruptions. Royal Dutch Shell Plc yesterday halted the Trans Niger Pipeline due to a nearby fire. The line is used to transport Bonny Light crude to the company’s export terminal.

Shell is investigating to determine the impact of the fire on Bonny Light production, Sally Donaldson, a London-based spokeswoman for the company said by phone. The grade had been under force majeure for nearly a month until September 6. At the weekend militants claimed an attack on a pipeline hauling Bonny Light.

Shell has declined to say when it expects to resume Forcados crude exports. There is also no update for a restart of Qua Iboe shipments, Ogechukwu Udeagha, a Lagos-based Exxon spokesman, said by phone.

Source: Bloomberg Business News