Nigeria has launched a new low-sulfur grade of crude oil which is particularly suited to the European market as it seeks to produce and sell more crude, and generate more foreign exchange.
The new grade is called Nembe, named after Nembe in Bayelsa state, state oil company Nigeria National Petroleum Corporation (NNPC) said.
The grade is similar to Nigeria’s other distillate-rich grades such as Forcados, Bonga and Egina, Maryamu Idris, executive director crude & condensate at NNPC Trading, told Reuters Tuesday.
Nembe could compete with crudes from Brazil and Azerbaijan on the European market, Idris said at the Argus European Crude Conference in London.
Nigeria has already sold cargoes of the new grade, selling two cargoes of 950,000 barrels each to France and the Netherlands in October, a source told Reuters at the conference.
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The Nembe grade could help Nigeria to increase its oil production and win a higher quota in the OPEC+ agreement. The country has a long history of underproducing oil due to a variety of factors, including corruption, insecurity, and aging infrastructure.
The country is currently producing around 50,000 barrels per day (bpd) of the new Nembe grade. It plans to increase daily production to 80,000 bpd by the first quarter of 2024, and to 150,000 bpd by early 2025, according to the Reuters.
Nigeria has repeatedly failed to meet its crude oil production quota as assigned by OPEC. Currently, Nigeria’s oil production is around 1 million bpd below its capacity.
The new Bola Tinubu government aims to significantly increase its oil production to up to 1.7 million bpd by November 2023, hoping to win a higher quota in the OPEC+ agreement, Gabriel Tanimu Aduda, Permanent Secretary at Nigeria’s Ministry of Petroleum Resources, told Energy Intelligence in July.
Nigeria’s OPEC quota was 1.742 million bpd earlier this year, but due to its underproduction of more than 400,000 bpd, the output cap for Nigeria was lowered to 1.38 million bpd at the OPEC+ meeting in early June.
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