Nigeria is set to increase its crude oil production with the launch of the new Utapate terminal in the Niger Delta, according to Bloomberg data. The terminal produced nearly 19,000 barrels per day (bpd) in June and is expected to reach 50,000 bpd by year-end, becoming a significant crude grade for the country.
Utapate, a subsidiary of the state-owned Nigerian National Petroleum Company (NNPC) Limited, loaded its first export cargo last month, along with venture partner Natural Oilfield Services Limited. This new addition is part of Nigeria’s broader plan to boost oil production from the current 1.27 million bpd to 2 million bpd, a level last seen before the COVID-19 pandemic in 2019.
Cargo Headed for Europe
Utapate, a light and low-sulfur oil from the Niger Delta, joins the diverse array of crude grades produced in Nigeria. Tanker-tracking data from Bloomberg shows that the Suezmax Front Seoul loaded Utapate on July 24 and is now en route to Las Palmas in the Canary Islands. The Utapate grade will be processed in Europe and Asia, with the first shipment destined for Spanish refiner Repsol SA. This demonstrates Repsol SA’s commitment to incorporating diverse energy sources.
Challenges and Strategic Goals
Despite being a leading crude oil producer in Africa, Nigeria has struggled to meet its OPEC quota of 1.5 million bpd. This shortfall has resulted in significant revenue losses, as crude oil is the country’s primary source of foreign exchange. The main obstacles include oil theft, vandalism, and underinvestment in the sector.
In July, NNPC declared a war on crude oil theft, framing it as a matter of national security. The instability in production has also affected NNPC’s ability to supply crude to the Dangote refinery, forcing Dangote to source crude oil from other countries such as the United States, Brazil, and other African nations.
According to Heineken Lokpobiri, Nigeria’s Minister of State for Petroleum Resources, the country aims to achieve a total output of 2 million bpd by the end of the year. This goal highlights the government’s commitment to overcoming challenges and enhancing its oil production capabilities to meet both domestic and international demands.
