Nigeria launches revived ‘Nembe’ crude oil
State-owned oil firm plans to ramp up production as the country pushes to become self-sufficient
London — Nigeria’s state oil firm NNPC said on Tuesday it has launched a new grade of crude called Nembe, as Africa’s largest oil producer aims to ramp up crude production.
The country has long dealt with output declines due to crude theft, attacks on pipelines in the Niger Delta and a lack of investment, causing a dwindling of government revenue and large fiscal deficits. But output has picked up in recent months.
Nembe production was formerly added to the Bonny Light stream more than three years ago, until sabotage on the Nembe Creek Trunk Line (NCTL) hamstrung output, an NNPC source said on the sidelines of the Argus European Crude conference in London.
Now, the country has managed to resurrect Nembe as a separate grade, he said. The first cargoes of Nembe were sold in October, consisting of two 950,000 barrel shipments sold to France and the Netherlands, a second NNPC source said.
The first Nembe cargo was sold to United Arab Emirates-based trading firm Gulf Transport & Trading, which loaded it onto the Suezmax tanker Maran Orpheus for a voyage to an unknown end buyer in Fos, France, a source said.
Nembe is similar to Nigeria’s other distillate-rich grades such as Forcados, Bonga and Egina, Maryamu Idris, executive director of crude and condensate at NNPC Trading told the conference.
The low-sulphur grade commands a premium to the global Brent benchmark, and is a good candidate to compete with Brazilian and Azeri crude grades for European refiners, she added.
Production of Nembe is now about 50,000 barrels per day (bpd), but the NNPC is aiming for a rise to 80,000 bpd by the first quarter of next year and 150,000 bpd by the start of 2025, the source said.
An October Reuters survey showed Nigeria produces roughly about 1.5-million bpd, up from 1.39-million bpd in September, according to oil cartel Opec figures. But the country hopes to ramp up production to about 1.8-million bpd by the end of 2023, a third NNPC source said.
Last week, sources said the NNPC was set to supply the keenly awaited Dangote oil refinery with up to six cargoes of crude oil in December to be used in test runs.
Nigeria imports almost all of its refined fuel needs due to inadequate capacity and poor maintenance. The country is now pinning its hopes of ending fuel imports on the 650,000 bpd refinery being built by Aliko Dangote, Africa’s richest man.
The refinery is expected to run on crudes that carry an API gravity of 29 to 34 degrees, the first NNPC source said. API gravity is an index of the density of a crude oil — typically in the range of 15 and 45 degrees. Higher API indicates a lighter, lower density crude. Nembe carries an API gravity of 29, the source added.
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