By Adedapo Adesanya
Nigeria has added a new crude oil grade known as Utapate in a bid to boost output that has faltered due to underinvestment, vandalism, and oil theft in the energy sector.
This is coming at a time Nigeria, as Africa’s biggest oil producer, launched a new terminal, also called Utapate, in the Niger Delta region.
The new facility produced almost 19,000 barrels per day in June and is projected to reach a production capacity of 50,000 barrels per day by the end of the year, making it a significant crude grade in the country.
Utapate, a subsidiary of state-owned Nigerian National Petroleum Company (NNPC) Limited, and venture partner Natural Oilfield Services Limited, loaded the first export cargo last month, according to people familiar with the matter.
The additional grade is part of Nigeria’s effort to increase its oil production from the current 1.27 million bdp to 2 million barrels per day.
Utapate, a light and low-sulfur oil from the Niger Delta region, is among the numerous crude grades produced in Nigeria.
According to tanker-tracking data compiled by Bloomberg, the Suezmax Front Seoul loaded Utapate on July 24.
The vessel is now en route to Las Palmas in the Canary Islands. The Utapate grade is set to be processed in both Europe and Asia.
The first shipment of Utapate is destined for the Spanish refiner Repsol SA.
Despite being Africa’s largest crude oil production, Nigeria fails to satisfy its quota of 1.5 million barrels per day set by the Organisation of the Petroleum Exporting Countries (OPEC).
This deficiency has resulted in financial losses, since crude oil accounts for over 60 per cent of foreign earnings despite being just 5 per cent of gross domestic product (GDP).
The inability to reach the OPEC quota is mostly due to oil theft, vandalism, and insufficient investment in the industry.
In July, the Nigerian National Petroleum Company (NNPC) Limited announced a war on crude oil theft, claiming that it has become a national security issue.
Modupe Gbadeyanka