Shell shuts Bonny terminal

In a further blow to Nigeria’s oil industry and exportation, Shell today shut down its Bonny Light export terminal in Niger Delta.

A community leader said an explosion of an oil pipeline  triggered the shut down.

Shell said earlier a leak had shut down the exports, without giving details.

“There was a blast on the trunk line around Kalabari community of Rivers state,” said Nengi James, a community leader dealing with oil and gas companies operating in the region.

“We don’t know the cause and who is behind the explosion.”

Sabotage of oil installations have increased in recent weeks in Nigeria, after government’s anti-graft agency declared a militant leader, Government Ekpemupolo wanted for theft of over N30billion from NIMASA.

Shell Petroleum Development Co (SPDC) said it has  declared force majeure on Bonny Light crude exports on Tuesday after closing the Nembe Creek Trunk line (NCTL) for repairs after a leak. NCTL carries all the country’s Bonny Light.

The shutdown at Bonny Light will plunge Nigeria’s oil export  to its lowest in more than two decades.

The outage pushed oil futures higher, with benchmark Brent crude trading up 5 cents at $45.57 per barrel by 1321 GMT, after being slightly lower before the announcement.

Nigeria was due to export around 217,000 barrels per day of Bonny Light crude in June, out of a total of 1.7 million bpd.

If all Bonny Light production is cut, it would bring output to below 1.5 million bpd for the first time since September 1994, according to Energy Information Administration data. Nigeria exports almost all its production.

Nigerian oil production was above 2 million bpd as recently as 2013, the EIA data shows.

Shell and Chevron have evacuated oil workers in the past few days due to a surge in attacks on oil facilities, according to Nigerian labour unions.

Recent violence has raised concern that militants might resume an insurgency that has been quiet for the past several years. A labour union on Tuesday called for the evacuation of oil workers from the region.

Last week, a group known as Niger Delta Avengers attacked a Chevron facility in the Delta after claiming a strike in February against a Shell pipeline, which shut down the 250,000 bpd Forcados export terminal.