Nigeria’s state-controlled oil
company, Nigerian National Petroleum Corporation (NNPC Ltd), has launched a new
low-sulfur crude grade, called Nembe, which it plans to sell primarily on the
European market, an NNPC executive told Reuters on Tuesday.
The Nembe crude grade is similar
to other very popular blends of Africa’s largest oil producer, such as
Forcados, Egina, and Bonga, the executive director of crude and condensate at
NNPC Trading, Maryamu Idris, told the Argus European Crude Conference in London.
Nembe could compete with crudes
from Brazil and Azerbaijan on the European market, NNPC’s Idris told Reuters.
Organisation of Petroleum
Exporting Countries (OPEC) producer Nigeria has already sold cargoes of the new
grade. In October, NNPC sold two cargoes of 950,000 barrels each to France and
the Netherlands, a source with the Nigerian oil firm said on the sidelines of
the conference.
Nigeria is currently producing
around 50,000 barrels per day (bpd) of the new Nembe grade. It looks to ramp up
Nembe production to 80,000 bpd by the first quarter of 2024, and to 150,000 bpd
by early 2025, according to the source.
Nigeria has consistently failed
to produce to its quota in the OPEC+ agreement. The combination of pipeline
vandalism and oil theft with a lack of investment in capacity has made Nigeria
the biggest laggard in crude oil production in the OPEC+ alliance.
Currently, Nigeria’s oil
production is around 1 million bpd below its capacity. The government has cited
a lack of investments, a shortage of funding sources because of the energy
transition, and insecurity among the factors driving the situation.
Nigeria aims to significantly
increase its oil production to up to 1.7 million bpd by November 2023, hoping
to win a higher quota in the OPEC+ agreement, Gabriel Tanimu Aduda, Permanent
Secretary at Nigeria’s Ministry of Petroleum Resources, told Energy
Intelligence in July.
Nigeria’s quota was 1.742 million
bpd earlier this year, but due to its underproduction of more than 400,000 bpd,
the output cap for Nigeria was lowered to 1.38 million bpd at the OPEC+ meeting
in early June.
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