INDIA SLASHES OIL SUPPLY FROM NIGERIA IN FAVOUR OF ANGOLA
NIGERIA'S dominance of crude oil import to India may be waning, as the Asian country's government, through its national corporation, has unfolded plans to increase imports from Angola.
The development may be attributed to Nigeria's inability to meet India's crude oil demand, due to multiple force meajures declared by some international oil companies operating in the country, as a result of militants attacks on their facilities.
Already, Nigeria's projected export has been scaled down to around 2.06 million barrels per day (bpd) of crude oil in February, down from about 2.13 million bpd scheduled in January.
India imports 400,000bpd from Nigeria valued at $10 billion yearly. Additionally, major Indian oil companies regularly issue tender of Nigerian crude oil.
According to a trader source on Tuesday, Indian Oil Corporation (IOC), which has largely been importing crude oil from Nigeria, gave indication of signing more term contracts with Angola, rather than depending on supplies from Nigeria. 'So, we are looking at more term contracts with Angola,' a senior IOC executive who did not wish to be identified said.
Another senior IOC executive added that as the company geared up to commission its 15-million-tonne per year refinery at Paradip in Orissa, in March, 2012, to reduce its dependence on Nigeria. 'We are looking at widening our supply basket,' he added.
Nigerian crude accounts for around eight per cent of India's oil imports and was considered good due to its low sulphur content.
'Angolan crude, though acidic, can be mixed with other crude for use in refineries, said a senior executive at Bharat Petroleum Corporation.
'BPCL buys crude from Angola on spot. But considering its acidic nature, we have not gone for a term contract, as it may hurt plant equipment. We use it by blending it with other crude to fit our basket,' he added.
In the next two years, India's refining capacity will expand to about 4.8 million barrels per day against the present 3.7 million bpd. India is also looking at sourcing liquefied natural gas from Angola.
Trader sources disclosed yesterday that Indian IOC has issued a tender to buy March arrival sweet crude.
The tender closed yesterday with bids valid until today, he said.
Nigeria is expected to ship 64 full or part cargoes in February, loading programmes showed, compared with 72 in January. The biggest stream will be Qua Iboe, which will load 12 cargoes, one less than in January.
Nigeria's total daily exports in February will be the lowest since June 2010.
Even so, supply is expected to remain far above the production target Nigeria's output target is set through its membership of the Organisation of Petroleum Exporting Countries (OPEC). Nigeria's OPEC output limit is 1.67 million bpd.
OPEC had earlier lamented that Angola has continually been having the edge over Nigeria in terms of crude oil patronage, due to production disruptions in the West African Country's oil fields.?
It added that demand for Nigerian and Angolan crudes by Asia-Pacific buyers continued to increase in November, helped by robust diesel demand.
OPEC attributed this to the growing interest in West African crudes were the higher prices for regional Asian-Pacific grades, which made African crudes more competitive.