Nigeria to boost oil production as it adds new 50,000 bpd crude oil terminal – Report
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Nigeria is set to boost its crude oil production with the launch of a new terminal, Utapate, in the Niger Delta region, according to data from Bloomberg.
The report indicates that the new terminal produced almost 19,000 barrels per day (bpd) in June and is projected to reach a production capacity of 50,000 bpd by the end of the year, making it a significant crude grade in the country.
Utapate, a subsidiary of state-owned Nigerian National Petroleum Company (NNPC) Limited, and venture partner Natural Oilfield Services Limited, loaded the first export cargo last month, according to people familiar with the matter.
The additional grade is part of Nigeria’s effort to increase its oil production from the current 1.27 million bdp to 2 million bpd, which was what the country was producing before the outbreak of the COVID-19 pandemic in 2019.
Cargo headed for Europe
Utapate, a light and low-sulfur oil from the Niger Delta region, is among the numerous crude grades produced in Nigeria.
According to tanker-tracking data compiled by Bloomberg, the Suezmax Front Seoul loaded Utapate on July 24.
The vessel is now en route to Las Palmas in the Canary Islands.The Utapate grade is set to be processed in both Europe and Asia.
The first shipment of Utapate is destined for the Spanish refiner Repsol SA.
Repsol SA’s processing of Utapate demonstrates its commitment to incorporating diverse energy sources.
What you should know
Despite being a top producer of crude oil in Africa, Nigeria still fails to meet its OPEC quota of 1.5 million barrels per day (bpd) output.
This shortfall has led to revenue losses, as crude oil is the primary source of foreign exchange for the country.
The failure to meet the OPEC quota is primarily due to oil theft, vandalism, and underinvestment in the sector.
In July, the national oil company, NNPC, declared a war on crude oil theft, emphasizing that it has become a matter of national security.
The instability in ramping up production has also contributed to the NNPC’s lack of capacity to supply crude to the Dangote refinery.
This shortfall highlights the challenges faced by Nigeria’s national oil company in meeting domestic and international demands.
As a result, Dangote has been left with no choice but to seek crude oil from other countries. These include the United States, Brazil, and other oil-producing African nations.
According to the Minister of Petroleum Resources (State), Heineken Lokpobiri, Nigeria aims to achieve a total output of 2 million bpd before the end of the year.
