Saboteurs cut crude supply to Shell's Forcados terminal in Nigeria: sources

Crude oil supply into Shell's Forcados terminal has been cut by as much as 50% after an alleged sabotage operation on its pipeline, trading sources told S&P Global Commodity Insights Oct. 22, leading to loading delays and a possible force majeure declaration.

Sources, speaking on condition of anonymity due to the sensitivity of the situation, said repairs were being carried out on the 300,000 b/d capacity onshore Trans Forcados Pipeline, which transports one of Nigeria's largest crude streams, following an issue on the pipeline over the weekend.

"Heritage Energy Operational Services Limited (HEOSL) is preparing to declare [force majeure] at the Trans Forcados Pipeline due to unforeseen circumstances affecting operations," read an advanced notice circulated by the pipeline operator, sources said.

HEOSL, which operates the OML 30 license in the Niger Delta and a segment of the TFP, according to its website, did not immediately respond to a request for comment.

"Repairs being done on the pipeline due to sabotage so exports reduced by half. Should be done in seven days," one trading source said.

S&P Global Commodities at Sea showed five ballast crude vessels queueing at the Forcados terminal as of 1442 GMT.

Light Forcados crude is one of Nigeria's key export grades, produced by several companies and sold into Europe, North America and other parts of Africa.

The terminal is capable of processing 300,000 b/d of crude, but just 243,000 b/d of Forcados was produced in September, according to data from the Nigerian upstream regulator.

It was not clear how long the disruption would last, or the full extent of the problem. One market source said the issue should be fixed within seven days and it was only affecting the pipeline leading to the terminal, rather than the terminal itself.

Another trader, however, said the problem could last as long as three weeks.

The Shell Petroleum Development Company of Nigeria, the UK energy major's Nigeria subsidiary, is the operator of the SPDC Joint Venture and the Forcados Oil terminal. Shell did not immediately respond to a request for comment.

Major target

The Forcados pipeline and terminal have long been major targets for oil thieves in the restive Niger Delta. The terminal was offline for a large chunk of 2022 following attacks, while in 2021 the closure of the pipeline prompted a force majeure declaration by Shell on the whole Forcados terminal.

Platts, part of S&P Global Commodity Insights, last assessed Forcados at $74.55/b on Oct. 21 -- a $1.35/b premium to the Dated Brent benchmark -- well below its 2024 peak of $95.15/b on April 5.

Nigeria, Africa’s biggest oil producer, is capable of pumping some 2.2 million b/d of crude but produced just 1.46 million b/d in September, according to the Platts OPEC Survey from Commodity Insights, due to theft, underinvestment and technical issues at ageing oilfields.

Shell is attempting to exit the Niger Delta after agreeing to sell its onshore business to Renaissance -- a consortium of five mostly-Nigerian companies -- but the country's upstream regulator said Oct. 21 it was not ready to approve the divestment deal.