Exxon declares force majeure on oil liftings, a blow to Nigeria

ExxonMobil units in Nigeria have declared force majeure on oil shipments from multiple terminals following an industrial action by its staff.

The affected entities are Mobil Producing Nigeria Unlimited, Esso Exploration and Production Nigeria Ltd., and Esso Exploration and Production (Offshore East) Ltd., Bloomberg reported Monday, quoting an Exxon spokesperson.

Force majeure clears the companies of blame for not meeting contractual obligations with the Nigerian government to load crude oil, since that happened due to events beyond their control.

– Why this matters

Nigeria’s oil production and sales have suffered for years, failing to meet targets due disruptions including theft and sabotage. The declaration by Exxon will be a further blow to the country as it has implications for Nigeria’s oil revenue.

Bloomberg said oil traders can sometimes be wary of purchasing Nigerian oil because of concerns the cargoes won’t load as planned.

Exxon is among the largest oil producers in Nigeria and its Qua Iboe terminal is among the nation’s biggest export streams. The company pumped more than a fifth of the country’s barrels last year, according to Bloomberg data.

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Oil majors view Nigeria as becoming increasingly challenging to operate in. Exxon since early 2022 has tried to offload $1.3 billion in shallow-water assets to local firm Seplat. The deal faltered to go through after an objection from the state-oil company, NNPC.

Shell and TotalEnergies have exited the country for the same reasons.

“We will continue to take all reasonable actions necessary to resolve the impasse as soon as possible,” Reuters quoted spokesperson Michelle Gray as saying Monday.