In-house workers’ union strike action has forced Exxon Mobil to declare force majeure on loadings from different oil terminals in Nigeria.
According to a report in Reuters, the company made this known in a statement on Monday.
Join our WhatsApp Channel“We will continue to take all reasonable actions necessary to resolve the impasse as soon as possible,” Reuters quoted Exxon spokesperson Michelle Gray as saying in a statement on Monday.
Force Majeure is a principle in law that absolves a company (in this case, Exxon Mobil), from liability in the event it cannot fulfill the terms of a contract or if attempting to do so will result in loss or damage of goods for reasons beyond its control.
Reports indicate that the in-house workers’ union strike has halted crude loadings at four export terminals including Erha, Qua Iboe, Usan and Yoho.
ExxonMobil is said to be exporting around 300,000 bpd of crude and condensates from its Qua Iboe terminal in southern Akwa Ibom state, as well as natural gas.
The industrial action may impact on the plan to boost oil production in the country following the decline in output caused by massive theft, vandalism, and technical issues.
Nigeria is trying to increase its production to 1.6 million barrels per day to enable it to recover its long-time position as the largest African producer in the Organisation of the Petroleum Exporting Countries (OPEC).
In the third quarter of 2022, production in the country fell behind Angola to about 1 million barrels per day as a result of oil theft in the Niger Delta part of the country.
These challenges of oil theft and security issues reportedly led to the exit of Shell and TotalEnergies last year.
According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), oil production rose steadily since September but fell back to 1.5 million bpd in March.
Exxon has been trying to sell $1.2 billion in shallow-water assets in Nigeria, where it finds operations “challenging”, the company told Reuters in February, while keeping deep-water assets further from the coast.
Oil prices went lower on Monday morning as investors mulled over a possible May interest rate hike by the US Federal Reserve, which could dampen economic recovery hopes. Brent crude futures were down 55 cents, or 0.6 per cent, at $85.76 a barrel, a Reuters report indicated.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
