KEY POINTS
- Utapate crude launched, aiming for 80,000 bpd by 2025.
- Security measures stabilize current 40,000 bpd output.
- Utapate’s premium quality drives strong global demand.
Nigeria is intensifying efforts to secure long-term buyers for its newly launched Utapate crude, targeting a significant increase in output from its current 40,000 barrels per day (bpd) to 80,000 bpd by the end of 2025.
The initiative is part of the country’s broader strategy to boost oil production, which has faced challenges due to insecurity and frequent crude theft, despite Nigeria adhering to OPEC+ output cuts.
NNPC launches Utapate crude to boost output
The state-run Nigerian National Petroleum Company (NNPC) and its joint venture partner, Natural Oilfield Services, officially introduced the Utapate grade this week, marking a significant step in Nigeria’s bid to reclaim its position as a top global oil supplier.
The NNPC’s overall crude production has recently been reported at approximately 1.8 million bpd, with a target to hit 2 million bpd by the end of the year. Achieving this goal will require close collaboration with joint venture partners, production-sharing contractors, security agencies, and government stakeholders to stabilize operations and combat the impacts of theft.
Scaling up Utapate’s production and market reach
The Utapate field, which began production in May, is on track to gradually scale up output, with a target of 50,000 bpd by January 2024, reaching 60,000 bpd by mid-year, and achieving the ambitious 80,000 bpd goal by December 2025.
Lawal Sade, Managing Director of NNPC Trading, shared plans to secure term contracts with refineries across Europe and the U.S. East Coast, regions showing significant interest in the new grade. The NNPC is currently marketing one Suezmax-sized cargo of Utapate each month, amounting to approximately 1 million barrels.
Since its debut shipment in July, five Utapate cargoes have been loaded, with two more scheduled before year-end. Notable shipments include two to Spain’s Repsol and three to U.S. East Coast buyers. The field’s production has been supported by robust security measures, maintaining a stable 40,000 bpd output, with further increases planned in the coming years.
Utapate’s competitive edge and market prospects
With an API gravity of 44 and a sulfur content of just 0.07 percent, Utapate stands out in the market as a premium crude, competing effectively against other Nigerian grades like Amenam and Agbami, as well as Azeri Light from the Caspian Sea region.
According to Reuters, this quality has generated strong demand, positioning Utapate as a grade with substantial potential for international market growth. “The grade’s quality has generated strong demand, and we’re confident about its future in the global market,” Sade emphasized.
A Key pillar in Nigeria’s oil revival
The Utapate field, with proven reserves of 926 million barrels, holds significant potential for future production increases, offering Nigeria a promising avenue to boost its oil exports and restore its influence in the global energy market.
The commercialization of this new crude grade underscores Nigeria’s broader efforts to address domestic challenges while seeking to rebuild its credibility as a reliable energy supplier amidst evolving geopolitical dynamics.
