Nigeria produces new crude export grade on militant attacks

A new crude export grade has emerged in the past few months as Nigeria struggles to ramp up production to meet output quota amidst militant attacks on key oil and gas infrastructure.

 Called Forcados Light, the new crude is independent of the regular export grade, Forcados Blend, which is under force majeure and is being shipped via a terminal at the 125,000 b/d capacity Warri refinery.

Nigeria’s popular crude grade Forcados Blend has not been loaded through the Shell-operated Forcados terminal in the Niger Delta but has been difficult for several months now due to attacks in February and November leading to a declaration of force majeure on deliveries.

The crude for the new grade comes from OMLs 4, 38 and 41 in the Delta State, operated by indigenous producer Seplat Petroleum.

The company confirmed to Platts that crude is being sent from these fields via a 100,000 b/d pipeline to available storage tanks at the Warri refinery and sold on a FOB basis to Seplat’s offtaker, Mercuria, at the plant’s jetty.

Traders said exports are currently around 10,000-15,000 b/d, with a cargo being exported every four to six weeks.

The grade is marketed by Mercuria and mainly goes to refineries in the nearby West and Central Africa regions and is delivered in Aframax-size cargoes, sources added.

“It’s the light end of [Forcados] – comes from one of the Forcados fields,” a crude oil trader active in the West African market told Platts.

“It’s lifting when Forcados is on force majeure, and is normally exported with some of the heavier fields,” he added.

One trader even said some cargoes have gone to the US and Europe recently.

Traders also said the crude is currently trading at a discount to the main Forcados grade as it is much lighter than the main export grade.

Forcados was assessed by Platts at Dated Brent minus 85 cents/b on January 26.

Seplat said late last year that its intention was to have this “alternative export route available for the foreseeable future”, and was targeting exports of 30,000 b/d on a longer-term basis.

Seplat also said it is also working on upgrades to the jetty and liquid treatment infrastructure to be able to secure a reliable continuous export route.

Nigerian oil output plummeted to near 30-year lows of around 1.4 million b/d in May from 2.2 million b/d earlier this year as attacks on oil facilities