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West Africa's total seaborne crude oil exports fell below 3.5
million b/d in October, down from 3.84 million b/d in September.
The continent's major producer, Nigeria, has struggled to increase
its crude oil output and exports, primarily due to local
disruptions after attacks against oil infrastructure.
The country witnessed the sharpest crude oil production decline
among all OPEC members in October 2021. The fall observed in
Nigeria's crude oil output, estimated to have surpassed 70,000 b/d,
followed a force majeure declared by Shell, which halted loadings
of Bonny Light crude after a pipeline shut down.
Nigeria's unstable production could become one of the biggest
obstacles for OPEC+ efforts to increase supply by the end of this
year. The country's production capacity stands above 2.2 million
b/d of crude and condensate, with a plan to reach 1.75 million b/d
by early 2022, from an average of around 1.62 million b/d in H1
2021.
Nigeria is still far from recovering to its full potential. The
country, which produces sweet crude oil, mostly with light to
medium grades, is expected to face difficulties in maintaining its
production levels in the coming years given the mature profile of
several fields. Grades such as Bonga, Egina, and Qua Iboe will face
the most pressure as the government struggles to attract new
investment in the upstream.
New field developments are expected to only add up to 35,000 b/d
in 2022, while fields currently in the ramp-up phase could add
another 70,000 b/d.
Nigeria's government introduced the Petroleum Industry Act
(PIA), in August, targeting to drive an increase of its crude oil
output close to 4 million b/d.
However, a potential increase in the country's crude oil
production in coming years should not necessarily translate into
more exports, as Nigeria targets to refine more locally to supply
increasing domestic demand for refined products. The 650,000 b/d
Dangote refinery is on track to be operational from early 2022,
despite some delays sufferedd due to the coronavirus pandemic. This
will be Africa's largest refinery.
State-owned Nigerian National Petroleum Corp (NNPC) plans to
supply 300,000 b/d of crude to the refinery. The producer has been
in talks to acquire a 20% stake in the project, located near Lagos.
Nigeria has been importing more than 1 million mt of gasoline a
month, as all its refineries, with a combined capacity of 445,000
b/d, remain shut down.
The Dangote refinery's slate will include at least three
Nigerian crude grades - Escravos, Bonny Light and Forcados.
Shipments of Forcados fell to 172,000 b/d in October, according
to IHS Markit Commodities at Sea, from 229,000 b/d in September.
This is one of Nigeria's two largest grades exported, with average
loadings exceeding 210,000 b/d in H1 2021.
This gasoil-rich sweet crude blend has a full capacity near
250,000 b/d, heavily relying on oil pipelines which have suffered
multiple coordinated attacks by militants in the restive Niger
Delta, since early 2021.
Among other key crude grades of Nigeria, October's exports of
Egina reached 161,000 b/d, versus 167,000 b/d in September.
Escravos and Qua Iboe stood at 139,000 b/d and 151,000 b/d
respectively, down 13% and 20% over month.
Bonny Light loadings have fallen to 61,000 b/d in October,
versus 74,000 b/d in September. A year ago, activity typically
surpassed 160,000 b/d.
Nigerian loadings heading for Mediterranean importers fell
marginally to 454,000 b/d in August, from 458,000 b/d in September.
Flows shipped to Spain strengthened to 260,000 b/d in October, from
180,000 b/d in September. Flows to NW Europe fell sharply, to
254,000 b/d in October, compared with 388,000 b/d in September.
Loadings heading for the Netherlands collapsed to levels near
96,000 b/d in October, compared to 162,000 b/d in September.
Shipments from Nigeria to India recovered in October, standing
at 283,000 b/d, versus 200,000 b/d in September. Most flows refer
to grades such as Agbami, Akpo, Bonny Light and Bonga.
Angola's exports in August inched down 32,000 b/d to 1.19
million b/d, standing 2.6% lower than a year ago. Flows to China
declined to 832,000 b/d in October, versus 928,000 b/d in
September.
China's crude imports from Angola and West Africa overall have
fallen to 1.26 million b/d in October, from 1.37 million b/d in
September, as competition from Middle Eastern suppliers
increases.
Shipments to India collapsed to just 31,000 b/d in October, from
128,000 b/d in September.
Among Angolan crude oil grades, Dalia remains the largest, with
significant gains observed in October, with total exports at
184,000 b/d, the highest since March 2020. Growth on month was
rather impressive, at 45%.
Shipments of Nemba reached 123,000 b/d in October, from 95,000
b/d in September.
Similarly impressive growth has been observed in exports of
Hungo, which doubled to 123,000 b/d in October, from 63,000 b/d in
September.
Girassol and Pazflor remained almost unchanged on month, at
97,000 b/d and 92,000 b/d respectively.
Mostarda and CLOV suffered deep losses, having fallen to 92,000
b/d and 65,000 b/d in October, from 127,000 b/d and 133,000 b/d in
September.
Like Nigeria, Angola's oil sector is facing structural
challenges in the last five years - lack of new investments in
exploration and a failure to maintain production levels at mature
oil fields. New upstream projects could add up to 90,000 b/d in
2022, which may not be enough to raise output substantially.
Among Angola's mostly sweet crude grades, most pressure will be
felt by Nemba, Dalia, Mostarda, Gindungo, Girassol, and Kissanje in
coming years.
Meanwhile, involuntary outages across smaller producers in West
Africa pushed the region's supplies further down. Congo, Cameroon
and DR Congo have been the only exporters in the region to report
some small gains in October 2021, adding 173,000 b/d in total over
month. Exports of Djeno reached 268,000 b/d.
Ghana's crude oil exports stood at 123,000 b/d in October,
according to Commodities at Sea. This is 24%
down from September's shipments of 161,000 b/d. Activity typically
averages near 150,000 b/d. Crude loadings of the West African
country have been scheduled at 153,000 b/d in December, marginally
down from 158,000 b/d planned for November. Exports of Jubilee
should rise to 92,000 b/d in December, from 63,000 b/d in November,
according to loading schedules. Activity stood at 61,000 b/d in
October, according to Commodities at Sea, down from 97,000 b/d in
September.
