Nigeria has authorized two new crude oil export terminals that people involved say could process more than 400,000 b/d of oil and spur the production of more crude in Africa’s biggest producer.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority issued the licenses June 13 to a subsidiary of state-owned Nigerian National Petroleum Corp. and upstream operator Belema Oil Producing.
Farouk Ahmed, head of the regulator, said NNPC Exploration and Production will build the 2.2 million-barrel offshore Utapate terminal, while the Belema Sweet Export terminal will have a capacity of 2 million barrels when it comes online in 18-24 months.
Tein Jack-Rich, CEO of Belema Oil, said after the announcement that his company’s terminal hoped to handle 400,000 b/d of crude, according to local media reports.
NEPL operates onshore oil block OML 130 in the southeastern Niger Delta. The block yields around 35,000 b/d of crude, which is exported through ExxonMobil’s Qua Iboe terminal.
Belema Oil operates OML 55, while the NNPC and London-listed Seplat Energy also have an interest. The block produces around 80,000 b/d.
Jack-Rich said the project would increase crude production, both for local refineries and export, according to local news reports.
Nigeria has 31 export terminals but only 23 are active. In April, a 10-day strike by in-house unions at ExxonMobil’s export terminals — including the terminal that lifts flagship crude grade Qua Iboe — caused monthly Nigerian production to fall by more than 250,000 b/d.
Platts, a unit of S&P Global Commodity Insights, last assessed Qua Iboe at a 45 cents/b discount to Dated Brent on June 14.
Output issues
Bola Tinubu, Nigeria’s new president and who has upended the country’s economic orthodoxy since taking office late May, promised to raise crude output to 2.6 million b/d by 2027 during the presidential campaign.
Nigeria has the capacity to produce 2.2 million b/d, but output lagged below 1.3 million b/d for much of 2022, with the country’s ageing fields affected by outages. Rampant oil theft and insecurity has cost the country billions of dollars in lost exports and underinvestment.
Oil exports are a vital revenue stream for Nigeria, and a critical source of foreign exchange reserves, particularly as the country has been importing almost all its refined products.
Aliko Dangote, Africa’s richest man, has constructed a 650,000 b/d refinery to make Nigeria self-sufficient in fuels, but questions remain about the progress of the project — officially commissioned in June — following years of delays and cost overruns.
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