Wednesday, June 2, 2010

Nigerian crude oil exports to jump in July

Nigeria's crude oil exports were set to soar well above 2 million barrels per day (bpd) in July, trade sources said on Tuesday, as delayed cargoes from the previous two months boosted volumes.

Preliminary loading programmes showed Nigerian crude oil exports would average 2.18 million bpd in July, rising from 1.95 million bpd in June and 2.13 million bpd in May. Crude output had been steadily rising since an amnesty last year brought a sustained period of peace to the restive oil producing Niger Delta region, allowing foreign oil companies to repair damaged production facilities and ramp up production.

But crude output in June, which had been expected to hit more than a 2-1/2 year high, was reduced due to production outages to three major oil streams operated by ExxonMobil, Eni and Royal Dutch Shell.

RATE: As much as two thirds of Nigeria's 3 million bpd capacity has been shut in as a result of militant attacks on oil facilities that increased in intensity from around mid-2006.

Production of Nigeria's benchmark Qua Iboe, operated by Exxon, was the worst hit in May as a pipeline leak cut out around 150,000 bpd of crude production, according to industry sources.

Exxon declined to specify the amount of oil lost.


There were eight 950,000-barrel Qua Iboe cargoes due to be exported in July, six of which were delayed from the original June programme when a record 13 cargoes were planned. Despite the delays eight cargoes were now expected in June.

The Nigerian crude oil loading programme shows a total of 75 cargoes of differing sizes due to be shipped in July, rising from 67 in June and 73 in May.

Nigeria's July crude export was expected to be boosted by 3 950,000-barrel cargoes of EA crude, after none loaded in June.

Production of EA restarted last year after more than 3 years of outages following attacks on pipelines.

Exports could be even higher later this year if Exxon is able to fully restore Qua Iboe output, which reached 370,000 bpd earlier this year, but was only expected to produce 275,000 bpd in July.

The West African country is regularly producing well over its implied output target of 1.67 million bpd set out by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC agreed output curbs in 2008 to support falling oil prices which dropped from a high of nearly $150 a barrel in July 2008, down to below $33 in December the same year.

With U.S. crude trading within the $70 to $80 a barrel range members of the producer group have said they are happy with there is little incentive to adhere to output targets.

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