By Adedapo Adesanya
Following its unsold crude cargoes for the month of April, Nigeria has cut its official selling prices (OSP) to encourage buyers before releasing its May loading programmes.
The Nigerian National Petroleum Corporation (NNPC) cut the April official selling prices for Bonny Light and Qua Iboe by $5 a barrel to dated Brent minus $3.29 and minus $3.10 per barrel, respectively.
Like all other oil dependent economies, Nigeria has faced difficulty selling its crude following the outbreak of the COVID-19 which has reduced demand for the commodity. Also, the Saudi Arabia-Russia oil price war compounded more worries as the Kingdom flooded the market with cheap oil in its bid to fight for market share.
According to Reuters, May’s loading programmes emerged with key grades seeing a rise over the previous month. Bonny Light and Forcados are both higher and due to load 245,000 barrels per day, Bonga 123,000 bpd and Qua Iboe 215,000 bpd.
It was also reported that there will also be two cargoes each of Usan and Yoho, five cargoes each of Brass River and Agbami, six of Egina and four Amenam.
Business Post had earlier reported that the Group Managing Director of the Nigerian National Petroleum Corporation, Mr Mele Kyari, said recently that the country was already struggling to find buyers for its crude oil, saying over 50 cargoes were yet to be sold.
Mr Kyari said Nigeria’s crude cargoes had been stranded due to the higher selling price compared with its fellow Organisation of the Petroleum Exporting Countries (OPEC) members such as Saudi Arabia and Iraq, which could afford to offer discounts of around $5 to $8 per barrel to buyers.
With this decision to slash its crude grade prices, Nigeria will hope to compete with other major players and sell its cargoes which amounts to 70 percent of the country’s total exports.
According to Reuters, Nigeria’s African counterpart and fellow OPEC member, Angola, will be exporting 45 cargoes in May, up from 39 cargoes planned in April.
Sonangol was still offering several spot cargoes: Cabinda at dated Brent plus 50 cents, CLOV at dated Brent plus $1.20, Dalia at dated Brent minus 40 cents and Girassol at dated Brent plus $1.50
Modupe Gbadeyanka