Bloomberg reports that Nigeria is planning to increase its crude oil production following the opening of a new terminal in the Niger Delta, called Utapate.
According to the article, the new terminal produced about 19,000 barrels per day (bpd) in June and is expected to increase production capacity to 50,000 bpd by the end of the year, making it a significant crude grade in the country.
The first export shipment was loaded last month by Utapate, a venture partner of Natural Oilfield Services Limited and a subsidiary of the state-owned Nigerian National Petroleum Company (NNPC) Limited, according to sources familiar with the situation.
The extra grade is a component of Nigeria’s endeavour to boost oil output from 1.27 million barrels per day to 2 million barrels per day, the level at which the nation produced before to the COVID-19 pandemic’s 2019 outbreak.
Cargo bound for Europe
Nigeria produces a wide variety of crude grades, including utapate, a light, low-sulfur oil from the Niger Delta.
Bloomberg’s tanker-tracking data indicates that on July 24, the Suezmax Front Seoul loaded Utapate.
The ship is currently travelling to the Canary Islands’ Las Palmas. Processing of the Utapate grade is planned for both Asia and Europe.
Repsol SA, a refiner in Spain, is the recipient of the first cargo of Utapate.
Repsol SA has shown that it is committed to using a variety of energy sources by processing Utapate.
What to note
Nigeria continues to fall short of its 1.5 million barrels per day (bpd) OPEC output quota, even though it is one of Africa’s largest producers of crude oil.
Given that crude oil is the nation’s main source of foreign cash, this deficit has resulted in income losses.
Underinvestment in the industry, oil theft, and vandalism are the main causes of the OPEC quota not being met.
The national oil firm, NNPC, announced in July that it was going to wage war on crude oil theft, citing the fact that it was now a national security issue.
The NNPC’s inability to provide crude to the Dangote refinery is partly due to the unpredictability in output ramping up.
This deficiency underscores the difficulties Nigeria’s state oil firm faces in satisfying both local and foreign demand.
Dangote is now forced to look for crude oil from other nations as a result. These include the US, Brazil, and other African countries that produce oil.
Heineken Lokpobiri, the State Minister of Petroleum Resources, stated that Nigeria wants to produce 2 million barrels of oil per day by the end of the year.
