Shell PLC’s Nigerian unit has announced the lifting of force majeure on its Bonny oil export program, effective March 15th. This comes after the company declared force majeure on March 3, 2023, due to a significant decline in crude receipts at the Bonny Oil and Gas Terminal. Force majeure is a legal clause in contracts that protects companies from liabilities in meeting contractual obligations due to circumstances beyond their control.
The decline in crude receipts was caused by a rise in oil pipeline vandalism and oil theft in Nigeria’s Niger Delta region, where almost all of the country’s oil is produced. This led to a sharp decline in the country’s oil exports, which fell to less than 1 million barrels a day late last year.
However, efforts by the Nigerian National Petroleum Co. with government and private security agencies and firms to curb pipeline vandalism and oil theft are paying off. This has led to increased oil production by Nigeria in February, with the Organization of Petroleum Exporting Countries reporting that Nigeria’s oil production rose to 1.3 million barrels per day in February.
Nigeria, Africa’s largest crude oil exporter, earns more than 90% of its foreign exchange and 70% of government revenue from oil exports, according to the International Monetary Fund. The lifting of force majeure is a positive development for the country’s economy and the global oil market.