By David Elliott
Last Update: 4:22 AM ET May 16, 2007
LONDON (MarketWatch) — Royal Dutch Shell PLC’s Nigerian joint venture has called a force majeure on oil exports from the Bonny Light field in Nigeria in the wake of an attack on an oil facility.
Shell spokesman in London Adam Nugent said Wednesday the force majeure came into effect at 1700 GMT Tuesday and will affect May and June loadings.
Production from the field was cut by 170,000 barrels a day after the occupation of the Bomu manifold, a pipeline valve on the trans-Nigerian pipeline in Ogoniland, southern Nigeria.
Joint venture Shell Petroleum Development Co. accounts for 137,000 barrels a day of the lost production and, of this, Shell’s share is 41,000 barrels a day. SPDC is a joint venture operated by Shell, which owns 30%, and the Nigerian National Petroleum Company, with 55%, Total SA (TOT) with 10% and Eni SpA (E).
Traders of West African crude expect to see the output lost as a result of the occupation restored by “the end of the week” but Shell couldn’t set a date.
News of the production outage pushed benchmark Brent crude oil prices over $2 a barrel higher Tuesday and concern over the reliability of oil supply from the region has been underpinning the market for a number of weeks.
This follows a ramp up in the number of attacks on oil companies operating in Nigeria in the wake of the country’s controversial presidential elections.
Dow Jones Newswires’ estimates suggest the violence has led to the shut in of nearly 1 million barrels a day of production.
Oil companies are bracing themselves for a continuation of the attacks in the run up to the inauguration of Nigeria’s new government on May 29.
Chevron Corp. (CVX) has already started evacuating hundreds of oil workers and contractors from the region.
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