London, November 9, 2023 – The Nigerian National Petroleum Company Limited (NNPC Ltd.) has shed light on the repercussions of the ongoing Russia-Ukraine conflict on Nigeria’s crude oil exports, revealing a notable decline in demand from Asia while highlighting an upswing in shipments to Europe.
Speaking at the Argus European Crude Conference in London, Maryamu Idris, Executive Director of Crude & Condensate at NNPC Trading Limited, outlined the challenges faced by Nigeria in the wake of the Eastern bloc hostilities. She explained that the conflict has led to a decrease in the once-reliable Asian market’s demand for Nigerian crude, particularly in India.
Idris noted a significant shift, citing a drop in Nigeria’s crude exports to India from approximately 250,000 barrels per day (bpd) before the February 2022 invasion of Ukraine to 194,000 bpd in the six months following the conflict. This year, only around 120,000 bpd of Nigerian crude volumes have made their way to India.
However, she highlighted a positive trend in the European market, stating that Nigerian crude flow to Europe has increased to fill the supply gaps left by the ban on Russian crude. Before the war, 678,000 bpd of Nigerian crude grades went to Europe, increasing to 710,000 bpd six months later and reaching 730,000 bpd so far this year.
Idris emphasized that Nigerian grades are becoming a significant component in the post-war European refining landscape, with several distillate-rich grades, including Forcados Blend, Escravos Light, Bonga, Egina, and the latest addition, Nembe Crude, gaining popularity.
Addressing production challenges, Idris acknowledged the impact of the COVID-19 pandemic on Nigeria’s oil industry, including reduced upstream investment, supply chain disruptions, ageing oil fields, and oil theft. She stated that these factors contributed to production declines in the second half of 2022 and early 2023.
However, Idris expressed optimism, attributing the challenges to the past with the implementation of the Petroleum Industry Act of 2021. She highlighted NNPC Limited’s efforts to secure partnerships with financial institutions to promote upstream investments and restore production capacity.
In September 2023, Nigeria recorded its highest crude oil and condensate output in nearly two years, reaching 1.72 million barrels per day, signaling a rebound in production. Idris affirmed NNPC Limited’s commitment to addressing security and environmental challenges in the Niger Delta in collaboration with host communities and private stakeholders.
Furthermore, she outlined NNPC Limited’s focus on the downstream sector, emphasizing a ‘wells-to-wheels’ approach. The restructured NNPC Trading Company is spearheading efforts to grow NNPC’s global presence in crude, condensate, gas, and petroleum products.
The insights were shared during the Argus Crude European Crude Conference Panel Session themed, ‘The Invisible Hand: How Are Shareholders and Asset Managers Meeting the Crude Industry? What Does This Mean for the Future of Crude in Europe?’ Moderated by James Gooder, Vice President Crude of Argus, the session delved into the evolving dynamics of the crude industry in Europe.
