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Nigeria seeks long-term buyers of new Utapate oil and aims to double production

November 20, 2024

Nigeria seeks long-term customers for the new crude oil grade Utapate, and aims to double its output from 40,000 barrels a day by 2025.

The launch is part Nigeria's effort to boost its oil output, which has been hindered for years by unrest and theft of crude, despite being a member of the ongoing OPEC+ Production Cut Pact.

NNPC announced last week that Nigeria produces around 1.8 millions bpd, and aims to reach 2 million bpd before the end of the year, based upon collaborative efforts with joint venture operators, its partners in production-sharing agreements, as well as security agencies and government.

The venture partners aim to increase Utapate's output from 50,000 bpd per day in January to 60,000 bpd per day in June, and 80,000 bpd at the end of 2025.

Lawal Sade, NNPC Trading Managing director, said at the Argus Conference European Crude on Wednesday: "We're really interested in seeing if we can make a contract for a set period with refineries from Europe and the U.S. East Coast that have shown a lot of interest in the cargoes."

Sade said that the increased security in the area of production allowed them to predict what they could load.

NNPC aims to load and sell around 1 million barrels of Suezmax cargo per month at 40,000 bpd.

Since July, five Utapate cargoes were loaded. Two more are expected to be delivered before the year's end. Two of the five cargoes were sold to Repsol in Spain, and three to users on the U.S. East Coast, according to delegates.

Sade explained that the grade, which has an API of 44 and a sulfur content of 0.07%, will compete on international markets with Nigerian grades, such as Amenam, Agbami and Azeri light.

The Utapate field started production in May. The block contains 926 million barrels of proven oil reserves. The report was written by Robert Harvey in London and Enes Tunagur; edited by Jan Harvey.

(source: Reuters)

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