Shell force majeure at Bonny after 250,000 bpd loss

LAGOS, Nov 6 (Reuters) - Royal Dutch/Shell said on Monday it had declared force majeure at its 475,000 barrels per day Bonny Terminal in southeastern Nigeria because of community unrest in the area.

Nigerian oil analysts said the Shell losses could effectively wipe out OPEC's 500,000 bpd brought to market last month under the cartel's mechanism for balancing output and world oil prices.

A Shell spokesman told Reuters in Lagos that the force majeure would last through the rest of November.

"The force majeure affects all November cargoes commencing from November 6 to November 30," the spokesman said.

Oil traders said the setback could lead to three to nine- day delays in the November loading schedule for Bonny Light and that some cargoes in the November programme could be deffered into December.

The spokesman said Shell had informed its joint venture partners, led by state-run Nigerian National Petroleum Corp and including TotalFinaElf and Agip .

"A series of community unrests and illegal bunkering (tapping of crude oil) forced closures of some of our flow stations last week," the spokesman said.

"As at that time (last week) we were losing 250,000 bpd, although the figure must have gone down because some of the facilities have been reopened," he added.

He named some of the affected flow stations as Ekulama, Nembe Creek and Odiama -- all feeding into Bonny Terminal, located off the oil city of Port Harcourt. The precise nature of the community unrest was not immediately clear.

In recent times Shell, Nigeria's biggest oil producer, has been hit by militant communities in the volatile Niger Delta region demanding a greater share of oil weatlh.

Oil production facilities have been targets of attacks by villagers demanding compensations before repairs are carried out.

But the spokesman said the rising cases of illegal bunkering of crude oil was now a disturbing phenomenon for oil companies.

"Illegal bunkering before now was associated with refined oil products. But crude oil bunkering is a new phenomenon and very disturbing," he said.

Last month, Shell shut in about 60,000 bpd of oil for some days after suspected illegal bunkerers damaged an oil pipeline which led to a spill and subsequent closure of its facilities in southern Delta State.

Earlier in July the oil giant shut in a total of 90,000 bpd for more than one week after a pipeline fire triggered by illegal bunkerers forced it to shut three oil flow stations.

-- Carl Jenkins (somewherepress@aol.com), November 07, 2000

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-- Carl Jenkins (somewherepress@aol.com), November 07, 2000.

Nov. 6, 2000, 6:59PM

Shell Nigeria turmoil pushes oil prices up NEW YORK -- Oil and gasoline futures rose Monday on the New York Mercantile Exchange.

Oil futures bounced partly on news that civil unrest had prompted Shell Nigeria to declare that it will be unable to meet its contract obligations during the rest of November at its 475,000-barrel-a-day Bonny Terminal, traders said.

A company spokesman said that up to half of the unit's output has been cut. Some loadings have been delayed three to nine days.

December unleaded gasoline futures rose 1.27 cents to 88.22 cents, partly because inventories in the United States are the lowest since last November, analysts said. But supplies are expected to flood in shortly, which will weaken gasoline contracts.

December crude futures closed up 15 cents at $32.86 a barrel.

Heating oil futures fell 0.48 cent to 91.69 cents a gallon.

December natural gas fell 8.2 cents to $4.849 per thousand cubic feet. In London, Brent crude from the North Sea gained 44 cents to $31.29 per barrel.

Analysts said that, longer term, a fundamental supply change is expected to put downward pressure on prices.

"There seems to be crude relief headed this way," a trader said. He was referring to the extra oil that is expected to hit the market from the Organization of the Petroleum Exporting Countries' decision to increase its production another 500,000 barrels a day and the imminent release of 30 million barrels from the U.S. Strategic Petroleum Reserve.

The Middle East Economic Survey estimated that 300,000 barrels a day of the 500,000-barrel increase that OPEC has pledged are already being pumped.

http://www.chron.com/content/chronicle/business/energy/index.html

-- Martin Thompson (mthom1927@aol.com), November 07, 2000.