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Shell Says Nigerian Exports Will Be Disrupted for a Fifth Month

By Dulue Mbachu and Alex Kwiatkowski

June 17 (Bloomberg) — Royal Dutch Shell Plc told customers that Nigerian shipments will be disrupted for a fifth month in July as violence escalates in Africa’s largest oil producer.

Shell suspended export obligations on crude exports from the Forcados terminal inNigeria to cover the remaining loading program for June and July, company spokesman Precious Okolobo said by phone from Lagos today.

A government offensive against armed groups since May has resulted in intense fighting in the western part of the oil- producing Niger delta region, where the Forcados terminal is located. Militant attacks have cut Nigeria’s oil exports by more than 20 percent since 2006.

Force majeure is a legal clause that allows companies to miss export obligations due to circumstances beyond their control. The extension took effect from 6 p.m. yesterday due to damage to the main pipeline supplying crude oil to the Forcados terminal, Okolobo said.

“An investigation into the damage is ongoing, and we’re also taking steps to repair the line and resume production,” he said.

Force majeure also remains in place in exports of Shell’s Bonny Light and EA crude in June and also on supplies of gas to the NLNG project, The Hague-based Shell spokesman Wendel Broere said in a phone interview. The measure has only been extended into July for Forcados supplies, he said. EA production has been disrupted since February 2006.

Shell, Europe’s biggest oil company, originally declared force majeure on Forcados exports at the beginning of March following an attack on the Trans-Escravos pipeline.

The Movement for the Emancipation of the Niger Delta or MEND, the main militant group in the region, claims to be fighting to channel more oil revenue to the region’s poor. Some armed groups hijack vessels and kidnap oil workers for ransom.

To contact the reporter on this story: Dulue Mbachu in Lagos at[email protected]

Last Updated: June 17, 2009 03:41 EDT

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