Nigeria will introduce a new type of crude oil, called Obodo semisweet, to the market in April. This comes as the country steadily works on increasing its crude oil supply.
Crude characteristics and pricing
Obodo has an API gravity of 27.65° and a sulfur content of 0.05%, which is favorable for refining.
Argus reported that sources suggest the price of this new crude will likely be similar to Nigeria's Bonga semisweet. However, the exact production levels of Obodo have not yet been disclosed.
Obodo's role in Nigerian crude supply
Obodo adds to Nigeria's growing supply of medium-sweet crudes, such as Forcados, Escravos, and Bonga. These crudes have found strong demand in Europe, Nigeria’s main export market. Obodo could also be in demand at European refineries, especially after maintenance ends in late April or early May.
Production and distribution
The crude will be produced by Continental Oil & Gas, a Nigerian independent company, in the OML 150 oil block, located in the Niger Delta. The state-owned NNPC will handle the sale and distribution of Obodo. Continental Oil & Gas operates in OML 150 under a production-sharing agreement with the government.
Challenges in the market
Despite some challenges, Nigerian crude experienced slower demand during the April trading period. Cheaper alternatives like US WTI and other Mediterranean crudes attracted European buyers. However, the focus has now shifted to May, with 15 Nigerian April cargoes still looking for buyers.
Plans for production growth
Nigeria’s oil regulator has a plan to increase production by 1.07 million barrels per day by 2026. This plan includes investments in oil blocks through joint ventures and contracts. Despite these efforts, Nigeria has faced difficulties in attracting investment, and its oil production has not met targets.
What are some types of crude oil produced in Africa?
Africa produces diverse crude oil types with varying characteristics, primarily categorized by API gravity (light, medium, heavy) and sulfur content (sweet, sour). Below is a breakdown by country and key grades:
Nigerian Crude
Qua Iboe and Bonny Light
API Gravity: Light Sweet Crude
Description: Qua Iboe and Bonny Light are some of Nigeria’s most popular crudes, known for their light and sweet nature, making them highly desirable for refining. They are often exported to Europe, Asia, and the Americas due to their low sulfur content and high-quality characteristics.
Agbami and Akpo
API Gravity: Light CrudeDescription: Agbami and Akpo are lighter crudes with low sulfur content, often used in a variety of refining processes. These crudes are also exported mainly to Europe and Asia for their refining flexibility and demand.
Forcados
API Gravity: Medium CrudeDescription: Forcados is a medium-grade crude oil that is also sought after for its low sulfur content. It is one of Nigeria’s key exports, used in refineries mainly in Europe and Asia.
Angolan Crude
Dalia and Pazflor
API Gravity: Heavy Sweet CrudeDescription: Dalia and Pazflor are heavier sweet crudes produced in Angola. Despite being heavier, they are highly valued for their sweetness, with a relatively low sulfur content, making them ideal for refining in high-demand markets.
Cabinda Blend
API Gravity: Medium CrudeDescription: Cabinda Blend is a medium crude with low sulfur content, popular in European refineries due to its high quality and versatility in refining processes.
Nemba
API Gravity: Light Sweet CrudeDescription: Nemba is one of Angola’s high-quality light sweet crudes, known for its low sulfur content and desirable characteristics in refining, especially in European and Asian markets.
Libyan Crude
Bouri and Sedra
API Gravity: Waxy CrudeDescription: Libya produces waxy crudes such as Bouri and Sedra, known for their high wax content and challenges in refining. However, they remain valuable for specific processes and are used in European refineries.
Republic of the Congo Crude
Djeno
API Gravity: Heavy Sweet CrudeDescription: Djeno is a heavy sweet crude produced in the Republic of the Congo. It is known for its low sulfur content and is prized in global refining markets, particularly in Europe.
Democratic Republic of Congo (DRC) Crude
General Grade
API Gravity: Heavy CrudeDescription: DRC’s oil is classified as heavy crude, with a higher sulfur content. While this crude is more challenging to refine, it still has a market for its heavier distillation processes.
Ghanaian Crude
Jubilee and TE
API Gravity: Medium CrudeDescription: Ghana’s Jubilee and TE fields produce medium-grade crude oils with moderate sulfur content. These crudes have growing importance in the global market and are used primarily in Europe and Asia.
Egyptian Crude
Mosaic Blend
API Gravity: Medium Crude
Description: Egyptian crude, particularly the Mosaic Blend, is medium-grade with slightly sour characteristics due to its higher sulfur content. Despite this, it is still widely used in global refining markets for various purposes.
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