ExxonMobil Declares Force Majeure on its operations in nigeria

ExxonMobil Declares Force Majeure on its Operations in Nigeria

04-29-2008

ExxonMobil Corp, a major crude producer in Nigeria, has declared a force majeure on its operations in Nigeria due to ongoing labor strike. The strike affects around 800,000 b/d out of production and the company is currently unable to meet its contractual obligations.

"The (Exxon) affiliates will not speculate about the length of the shut-in nor how long it will take to restart production," an Exxon spokeswoman said.

ExxonMobil also said it was still hoping for a resolution to the strike.

"We have notified all relevant agencies including the Nigerian National Petroleum Corp. and the Department of Petroleum Resources and are working with them to ensure quick resolution of the issues," the company said.

The state-run NNPC management is mediating in the strike, which the workers began Thursday over their demands for higher wages at ExxonMobil's Nigerian unit, Mobil Producing Nigeria Unlimited. Talks are being held Monday in the capital, Abuja.

Even if the strike ends soon it will be many days before pipelines, drilling rigs and export facilities can be brought back into full service. The labor walk-out started late last week and has helped send crude prices sharply higher.

Crude-oil futures are trading 12 cents higher at $118.64 a barrel on the New York Mercantile Exchange. Earlier in yestrday, futures set a fresh intraday record high of $119.93, partly on this latest disruption to Nigeria supplies.

This strike is yet another setback for Nigeria's ability to supply crude reliably. Months of civil unrest and repeated attacks on oil production and transportation facilities have already curtailed production in Africa's largest producer.