Infostride News sheds light on the impact of the Russia-Ukraine conflict on Nigeria’s crude oil inflow in the international market, a story articulated by NNPC Limited’s Chief Corporate Communications Officer, Femi Soneye. During a panel presentation at the Argus European Crude Conference in London, Executive Director Maryamu Idris of NNPC Trading Limited explained that the war has led to a decrease in demand for Nigerian crude in the once-reliable Asian market, particularly in India.
Idris elaborated on the significant shift in India’s preferences, highlighting the reduction in Nigeria’s crude exports to India from around 250,000 barrels per day (bpd) in the six months prior to the February 2022 invasion of Ukraine to 194,000 bpd in the subsequent six months. In the current year, only approximately 120,000 bpd of Nigerian crude volumes have made their way to India. This decline is attributed to India’s increased appetite for discounted Russian barrels, adversely affecting Nigerian volumes.
Contrastingly, the European market has seen an uptick in Nigerian crude flow as it aims to fill the supply gaps left by the ban on Russian crude. Idris pointed out that, six months before the war, 678,000 bpd of Nigerian crude grades went to Europe. This figure increased to 710,000 bpd six months later and further to 730,000 bpd in the current year. She emphasized that Nigerian grades, including Forcados Blend, Escravos Light, Bonga, Egina, and the latest addition, Nembe Crude, are becoming crucial components in the post-war palette of European refiners.
Highlighting the challenges faced by Nigeria in oil production, Idris acknowledged the impact of the COVID-19 pandemic, reduced investment in the upstream sector, supply chain disruptions, ageing oil fields, and oil theft. These factors contributed to production declines in the second half of 2022 and early 2023. However, she expressed optimism that these challenges are becoming obsolete with the implementation of the Petroleum Industry Act of 2021.
The PIA, she noted, has rejuvenated the business landscape and repositioned NNPC Limited to adopt a more commercial approach to managing the nation’s hydrocarbon resources. To address the production challenges, NNPC Limited has secured partnerships with notable financial institutions to promote upstream investments, aiming to restore and sustainably grow production capacity in the coming years.
Idris highlighted NNPC Limited’s efforts in collaboration with host communities and private stakeholders to address security and environmental challenges in the Niger Delta, fortifying production growth. She emphasized the progress made, citing September 2023 as the month when Nigeria recorded its highest crude oil and condensate output in nearly two years, reaching 1.72 million barrels per day.
In addition to growing upstream production volumes, NNPC Limited is expanding its participation in the downstream sector, aligning with a ‘wells-to-wheels’ approach. This strategy aims to bring the country’s unique hydrocarbon molecules as close as possible to end-users. The restructured NNPC Trading Company is the vehicle for this initiative, focused on enhancing NNPC’s presence in the global market for crude, condensate, gas, and petroleum products. Infostride News ensures that readers are informed about these developments in the dynamic landscape of Nigeria’s oil industry.
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