NNPC’s Executive Director of Crude and Condensate, Maryamu
Idris, made this disclosure during a recent panel presentation at the Argus
European Crude Conference in London.
Idris stated that the conflict has triggered a situation
where India, a primary destination for Nigerian grades, has increased its
appetite for discounted Russian barrels to the detriment of some Nigerian
volumes.
“To illustrate the extent of this shift, Nigeria’s crude
exports to India dwindled from approximately 250,000 barrels per day (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.
She noted that despite this decrease in demand from India,
the Nigerian crude flow to Europe has increased in a bid to fill supply gaps
left by the ban on Russian crude, pointing out 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.
Idris added that the conflict has accelerated the shift of
Nigerian crude grades to Europe, with several distillate-rich varieties
becoming a preferred choice for European refiners.
“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,”
she said.
In addition to the impact of the Russia-Ukraine conflict,
Idris said that Nigerian crude output had also been affected by production
challenges, including reduced investment in the upstream sector, supply chain
disruptions, ageing oil fields, and oil theft.
Idris, however, noted that the challenges are 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, NNPCL has secured vital partnerships with
notable financial institutions to promote upstream investments to restore and
sustainably grow production capacity in the coming years.
“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.”