Russia-Ukraine Crisis Takes Toll On Nigeria’s Crude — NNPC }{ The Scoper Media 



 …Says It Affects Inflow Into International Markets


   The Nigerian National Petroleum Com­pany Limited (NNPC Ltd.) has provided insight into how the lingering conflict be­tween Russia and Ukraine has impacted Nigerian crude oil inflows in the inter­national oil market, leading to a dip in demand from the once-dependable Asian market at the onset of hostilities in the Eastern bloc.

Maryamu Idris, Executive Director, Crude & Condensate, NNPC Trading Limited, said in a panel presentation at the Argus European Crude Conference in London, that in addition to the sub­stantial price shocks impacting com­modity and energy prices globally, the conflict between Russia and Ukraine has triggered a situation where India, a primary destination for Nigerian grades, 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,” she said.

On the other hand, she noted that 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.

“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. This was a strong factor behind our choice of London and the Argus European Crude Conference as the most ideal launch hub for the grade,” Idris also said.

On production challenges, Idris remarked that, like many other oil-producing countries, Nigeria had faced production challenges aggravated by the COVID-19 pandemic, including reduced investment in the up­stream sector, supply chain dis­ruptions impacting upstream op­erations, ageing oil fields, and oil theft by unscrupulous elements. These factors, she said, contrib­uted to production declines in the second half of 2022 and early 2023.


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, NNPC Limited has secured vital part­nerships with notable financial institutions to promote upstream investments to restore and sus­tainably grow production capac­ity in the coming years.

“NNPC Limited is champion­ing concerted efforts in partner­ship with host communities and private stakeholders to address the security and environmental challenges in the Niger Delta to further fortify production growth. 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.”

She affirmed that in addition to sustainably growing upstream production volumes, NNPC Lim­ited is also increasing its partici­pation in the downstream sector in line with a ‘wells-to-wheels’ approach, taking the country’s unique hydrocarbon molecules as close as possible to end-users.

The vehicle for this, she said, is the restructured NNPC Trad­ing Company, focused on grow­ing NNPC’s presence in the glob­al market for crude, condensate, gas, and petroleum products.

The Argus Crude European Crude Conference Panel Ses­sion was held with the theme, ‘The Invisible Hand: How Are Shareholders and Asset Manag­ers Meeting the Crude Industry? What Does This Mean for the Fu­ture of Crude in Europe?’

Vice President Crude of Ar­gus, James Gooder, moderated the event.

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