The demand for Nigeria’s crude oil has increased in European markets, while simultaneously declining in the Asian market. The Nigerian National Petroleum Company Limited (NNPC Ltd.) the country’s state-owned oil firm said, pointing out that the ongoing Russia-Ukraine crisis is the factor.
LEADERSHIP quoted Maryamu Idris, the Executive Director of Crude & Condensate at NNPC Trading Limited, during a panel presentation at the Argus European Crude Conference in London, highlighting the global impact of the conflict.
She explained that India, a major destination for Nigerian crude, has shifted its preference to discounted Russian barrels, resulting in a reduction of Nigerian crude exports to India from approximately 250,000 barrels per day (bpd) before the invasion of Ukraine in February 2022 to 120,000 bpd this year.
Conversely, Idris noted that Nigerian crude exports to Europe have risen, filling the supply gaps left by the ban on Russian crude. Six months before the conflict, 678,000 bpd of Nigerian crude went to Europe, increasing to 710,000 bpd six months later and 730,000 bpd in the current year.
Idris also addressed production challenges faced by Nigeria, citing factors such as the COVID-19 pandemic, reduced upstream sector investment, supply chain disruptions, ageing oil fields, and oil theft. However, she expressed optimism about overcoming these challenges with the implementation of the Petroleum Industry Act of 2021, which has rejuvenated the industry and positioned NNPC Limited for a more commercial approach.
While noting that NNPC Limited has secured partnerships with financial institutions to promote upstream investments, Idris also highlighted progress in addressing security and environmental challenges in the Niger Delta. She reported that Nigeria recorded its highest crude oil and condensate output in nearly two years in September 2023, reaching 1.72 million bpd.
Idris emphasized NNPC Limited’s commitment to sustainably growing production volumes and expanding its presence in the downstream sector. She mentioned the restructured NNPC Trading Company as the vehicle for achieving these objectives, focusing on global market participation for crude, condensate, gas, and petroleum products.