The ongoing crisis between Russia and Ukraine has taken a toll on Nigeria’s crude oil inflows, affecting demand and causing shifts in global trade dynamics, according to insights provided by the Nigerian National Petroleum Company Limited (NNPC Ltd.).
Maryamu Idris, Executive Director of Crude & Condensate at NNPC Trading Limited, highlighted the impact of the conflict on Nigerian crude oil exports in a panel presentation at the Argus European Crude Conference in London. She revealed that the conflict triggered a situation where India, a key destination for Nigerian grades, increased its preference for discounted Russian barrels over Nigerian volumes.
Idris noted a significant decline in Nigeria’s crude exports to India, from approximately 250,000 barrels per day (bpd) in the six months preceding the invasion of Ukraine in February 2022 to 120,000 bpd so far this year. On the contrary, Nigerian crude flow to Europe increased to fill supply gaps left by the ban on Russian crude.
Nigerian grades, including Forcados Blend, Escravos Light, Bonga, and Egina, became popular choices for European refiners in the absence of Russian Urals and diesel. The NNPC official highlighted the positive trend, emphasizing the growing importance of Nigerian grades in the post-war European refining landscape.
Addressing production challenges, Idris acknowledged issues faced by Nigeria, such as reduced investment, supply chain disruptions, ageing oil fields, and oil theft exacerbated by the COVID-19 pandemic. She expressed optimism that challenges are diminishing with the implementation of a new framework for the domestic petroleum industry (the PIA of 2021) and partnerships with financial institutions to promote upstream investments.
NNPC Limited aims to rejuvenate the business landscape and adopt a more commercial approach to managing Nigeria’s hydrocarbon resources. Idris reported a rebound in production, with Nigeria reaching its highest crude oil and condensate output in nearly two years, reaching 1.72 million barrels per day in September 2023.
In addition to growing upstream production, NNPC Limited is increasing its participation in the downstream sector, focusing on a ‘wells-to-wheels’ approach. The restructured NNPC Trading Company is instrumental in expanding NNPC’s global presence in crude, condensate, gas, and petroleum products.
The insights were shared during a panel session at the Argus European Crude Conference, exploring shareholder and asset manager roles in the crude industry and their implications for the future of crude in Europe.
