Agip Oil declares Force Majeure as vandals attack facility second time in two weeks

What this means is that Nigeria could be losing at least $2.84million per day as a result of the declaration.



Following another explosion at its facility, Nigerian Agip Oil Company has declared a Force Majeure on fuel exports of 25,000 bpd from its Brass terminal and gas feeds to the Nigeria Liquefied Natural Gas at Bonny.

Force Majeure is a legal clause in contracts that absolves firms from legal liabilities due to circumstances beyond their control.

Agip Oil had disclosed in a statement on Monday that the declaration of force majeure will inevitably affect the gas supplies to the Okpai Power Plant.

The company claimed that its action was coming in the wake of the recent attack on its facility in Nembe local government area of Bayelsa State.

It further announced that the blast was the second attack in a few days, after a similar incident occurred on February 28 at its Obama flow station, which led to a production shortfall of 5,000 barrels per day.

The explosion has cut oil export from its Brass Export terminal by some 25,000 barrels per day bpd, the company explained.

What this means is that Nigeria could be losing at least $2.84million per day as a result of the declaration.

Daily Trust reports that at the price of about $113.4 per barrel of Bonny Light, Nigeria’s loss from crude oil exports could amount to $2.84million per day. The loss will continue until the damaged facilities are repaired.

Gas output of 13 million standard cubic metres per day has been deferred due to the incident.

“An incident occurred on the Ogoda/Brass 24 oil line, at Okparatubo in Nembe Local Government Area of Bayelsa State.

“The event was caused by a blast, consequently causing a spill. All wells connected to that pipeline were immediately shut-in whilst river booms and containment barges were mobilized to reduce the impact of the spill.

“Regulators for inspection visit and repair teams have also been activated. State and Federal Government and Security authorities were notified. Deferred production is estimated at 25 kbopd oil and about 13 MSCM/d of gas.

“Force majeure has been declared at Brass terminal, Bonny NLNG and Okpai Power Plant,” Agip Oil added in the statement.

When contacted, the National Oil Spills Detection and Response Agency confirmed that Joint Investigative Visits on the two incidents have been conducted, but said that the field officers assigned were yet to file their reports.

The Director-General of NOSDRA, Mr Idris Musa, said the two incidents were traced to vandalism, adding that 20 barrels leaked in the Feb 28 incident, while 1,249.8 barrels were discharged into the environment in the second incident.

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