Nigeria's Qua Iboe Crude Under Force Majeure for at Least a Month

Reuters

LONDON, July 21 (Reuters) - Exports of Nigeria's largest crude oil stream, Qua Iboe, will remain under force majeure for at least one month while operator ExxonMobil repairs a leak on the pipeline feeding the terminal, sources told Reuters.

The damage is the latest setback to Nigerian oil production, which has been hobbled this spring by militant attacks and another accident at the Qua Iboe terminal earlier this year.

Exxon declared force majeure last week, citing a "system anomaly" it observed during a routine check. Sources told Reuters this week that the pipeline lost pressure while loading a cargo of crude oil and that the company subsequently discovered a leak on the underwater pipeline.

An Exxon spokesman declined to comment on any leak or a timeline for repairs.

Sources said that repairs needed to fix the leak, which was on part of the pipeline several miles offshore, were more extensive than initially thought and would not begin this week. The force majeure is likely to remain in place for a minimum of one month, several sources said.

Two of Nigeria's largest fields are now under force majeure, with Shell-operated Forcados crude oil exports halted since a militant attack on its subsea pipeline in February.

While Exxon said at the time it declared force majeure that the terminal was operating, traders said the company had not yet released a revised loading schedule for July crude exports, an ominous sign for those hoping to purchase or sell the oil.

According to Reuters vessel tracking, the last ship to load crude at the Qua Iboe terminal was the Ottoman Nobility on July 9. Typically, a vessel would load a million-barrel lot of Qua every three to four days, and exports of 250,000 bpd aboard eight vessels were scheduled for July.

Three other ships scheduled to load Qua were near the terminal, one since July 12.

The cause of the leak is unclear, but the force majeure came just days after militant group the Niger Delta Avengers claimed to have bombed a pipeline related to Qua Iboe.

Exxon denied at the time that there had been any attack, and said the force majeure was unrelated to any militant activity. However, the scale of the damage has raised questions among traders.

The Avengers warned that if the company moved forward with repairs "something big...will happen."

(Reporting By Libby George and Julia Payne; Editing by Alexandra Hudson and David Goodman)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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