13 June 2015, Lagos – Amid sustained low oil prices in the international market, Nigeria saw a significant decline in the import of its crude by some of the main buyers, including India, in the first quarter of the year, ‘FEMI ASU writes.
The Federal Government and oil companies in the country may have lost at least N67bn ($339m) in February and March this year as the country’s crude oil exports dropped by 1.860 million barrels and 4.085 million barrels respectively, compared to the January export level.
The country’s oil exports in February and March stood at 64.902 million barrels and 62.677 million barrels respectively, down from 66.761 million barrels recorded in January, data released by the Nigerian National Petroleum Corporation showed.
The price of crude oil (Bonny Light) averaged $58.09 and $56.69 per barrel in February and March respectively, while the naira averaged 194.47 and 197.07 to the United States dollar at the interbank market, according to the Central Bank of Nigeria.
In March, the United States did not import a single barrel of Nigerian crude, for the first time since July 2014.
Import from India, which recently replaced the US as Nigeria’s biggest oil market, was 7.765 million barrels, which is 32 per cent lower than the 11.531 million barrels it bought in January.
India’s import of Nigerian crude had in December 2014 tumbled to 5.2 million barrels from 13.7 million in October and 12.4 million in November.
The share of the Asian region in Nigeria’s crude oil export stood at 21 per cent in March, down from 23 per cent in February and 24 per cent in January, according to the NNPC data.
The Asian region, which is now increasingly a major target market for many oil exporters, is a key market for Nigeria.
“Four regions namely, Europe, Asia and Far East, South America and Africa remain the major destinations of Nigerian crude and condensate export,” the NNPC said.
Import of Nigerian crude from Europe, the country’s largest regional importer, fell to 27.002 million barrels in March, as against 29.093 million barrels in February and 31.229 million barrels in January.
In an attempt to win European market share, Saudi Arabia’s state-oil company, Saudi Aramco, cut the official selling price for its Arab Light crude to Northwest Europe by $1.50 per barrel for February 2015, putting it at a discount of $4.65 per barrel to the Brent Weighted Average – the lowest price since 2009.
Nigeria, Africa’s top oil exporter, is grappling to retain its market share, especially in Asia, where it saw an increase in the import of its crude oil last year, after it lost business in its main market, the US.
The country’s crude oil cargo has been selling at a discount in the past few months amid growing competition from other sellers, including Saudi Arabia.
In a bid to attract buyers, the NNPC last month lowered the official selling price for its largest crude oil stream, Qua Iboe, to dated Brent plus 35 cents per barrel, the lowest differential since May 2005, according to Reuters.
Bonny Light fell to dated Brent plus 23 cents. That the smallest differential since 2005 and compares with a 50 cent premium in June and $2.55 a year earlier, data compiled by Bloomberg show.
The Head of Energy Research, Ecobank Capital, Mr. Dolapo Oni, said, “Our biggest buyer since 2013 has been India and we have yet to firm up that relationship with long-term contracts and other concessions. So, we are quite vulnerable in the fast-evolving global oil market.
“I think the key move that can give us a competitive edge would be to firm up our relationship with our key buyers in India, The Netherlands, Spain, France and Indonesia.”