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The Nigerian National Petroleum
Company Limited (NNPCL) has said the country's supply of crude oil to European
buyers has jumped to 730 barrels per day (bpd) this year following strong
demand caused by the Russian war on Ukraine.
Executive Director, Crude &
Condensate, NNPC Trading Limited, Maryamu Idris said the oil flow to Europe
rose to fill supply gaps left by the ban on Russian crude following its
invasion of its eastern European neighbour on February 24, 2022.
Idris, who spoke during a panel
presentation at the Argus European Crude Conference in London, noted that six
months before the war, 678,000 bpd of Nigerian crude grades went to Europe,
compared to 710, 000 bpd six months later and 730, 000 bpd so far this year.
She said: "This trend makes
it evident that Nigerian grades are increasingly becoming a significant
component in the post-war palette of European refiners.
"Several Nigerian
distillate-rich grades have become a steady preference for many European
refiners, given the absence of Russian Urals and diesel.
"Forcados Blend, Escravos
Light, Bonga, and Egina appear to be the most popular, and our latest addition
-- Nembe Crude – fits well into this basket. This was a strong factor behind
our choice of London and the Argus European Crude Conference as the most ideal
launch hub for the grade."
Idris said this was gradually
compensating for the dip in demand for Nigerian crude oil at the Asian market
in the wake of the war.
She noted that India - one of the
primary destinations for Nigerian crude - abandoned it for Russian crude which
is being sold at discounted prices because of the war.
"To illustrate the extent of
this shift, Nigeria's crude exports to India dwindled from approximately
250,000 bpd in the six months preceding the February 2022 invasion of Ukraine
to 194,000 in the subsequent six months afterwards. And so far this year, only
around 120, 000 bpd of Nigerian crude volumes have made their way to
India," Idris said.
On production challenges, Idris
stated that like many other oil-producing countries, Nigeria had faced
production challenges aggravated by the COVID-19 pandemic, including reduced
investment in the upstream sector, supply chain disruptions impacting upstream
operations, ageing oil fields, and oil theft.
These factors, she said,
contributed to production declines in the second half of 2022 and early 2023.
Nevertheless, Idris said these
challenges were fast becoming a thing of the past with the introduction and
implementation of a new framework for the domestic petroleum industry (the PIA
of 2021), rejuvenating the business landscape, and re-positioning NNPC Limited
to adopt a more commercial approach to the management of the nation's
hydrocarbon resources.
According to her, NNPC Limited had
secured vital partnerships with notable financial institutions to promote
upstream investments to restore and sustainably grow production capacity in the
coming years.
Idris said: "NNPC Limited is
championing concerted efforts in partnership with host communities and private
stakeholders to address the security and environmental challenges in the Niger
Delta to further fortify production growth.
"Suffice to say, we have
already begun seeing significant progress on the rebound. In September 2023,
Nigeria recorded its highest crude oil and condensate output in nearly two
years, reaching 1.72 million barrels per day. This, we believe, is just the
beginning of our production rebound."
She explained that in addition to
sustainably growing upstream production volumes, NNPC Limited is also
increasing its participation in the downstream sector in line with a
“wells-to-wheels" approach, taking the country's unique hydrocarbon
molecules as close as possible to end-users.
The vehicle for this, she said,
is the restructured NNPC Trading Company, focused on growing NNPC's presence in
the global market for crude, condensate, gas, and petroleum products.
Courtesy: The Nation
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