World Powers Renew Scramble for Nigerian Crude

Nigerian oil facility
Total's offshore crude production facility in Nigeria

Though the international sanctions placed on Iranian crude oil export do not take effect until July 1, 2012, the International Energy Agency (IEA) has said Iranian oil exports have already dipped, while the Nigerian National Petroleum Cooperation (NNPC) has expressed doubts about meeting the needs of countries that are now turning to Nigeria for their supply.

While countries reliant on Iranian crude are struggling to find alternate sources, the IEA, in its April market report released recently, said production in the country fell by 50,OOO bpd to 3.3m bpd and could fall further to 2.6m bpd by mid-summer.

The IEA in the April report said: “The US sanctions essentially mean any company/countries trading with Iran will be cut off from the US financial system unless they can show they have taken steps to substantially reduce their reliance on Iranian oil.”

Though the United States has been the largest buyer of Nigerian crude, India and China have, over the years, been increasing their stake in the Nigerian oil industry and with both also being the largest buyers of Iranian crude, they are looking to further secure supplies from Nigeria.

The group general manager, group public affairs of the Nigerian National Petroleum Corporation (NNPC), Dr. Levi Ajuonuma, confirmed that there has been increased demand for Nigeria’s crude from countries that traditionally buy from Iran.

He said: “No one prays for crisis, no one prays for any country to have crisis, and we pray for crisis to be resolved all over the world. However, this has led to increased demand for Nigeria’s crude.”

Ajuonuma however, noted that Nigeria will be able to fill the gap because the country has had its own share of crisis. “We are just recovering from the Niger Delta crisis, and it is not completely over yet. There are still cases of crisis here and there, but we believe and pray to completely come out of it.”

He further added that for the nation to be able to fill in such huge gaps, there has to be massive investments in exploration activities in deep offshore. “We would require lots of investments in deep offshore and even onshore.

We require investments such as the Total Nigeria USAN field project which the president has just commissioned. Such investments would help, but we will not immediately be able to fill the gap.”

President Goodluck Jonathan, Tuesday, commissioned the two million barrel capacity Floating Production, Storage and Offloading (FPSO) USAN vessel at the USAN deepwater offshore oil field located in oil mining lease 138, located 100 kilometers offshore Port Harcourt in water depths up to 850 metres.

Oil production from the field is expected to be 180,000 barrels per day, according to oil giant Total.

Ajuonuma further stressed that more investment of the likes of USAN is needed in the country’s exploration and production (E&P), noting that demands would continue to grow for members of the Organisation of Petroleum Exporting Countries (OPEC).