Nigeria To Unveil New Crude Grade In Global Oil Market

The federal government is set to introduce a new crude grade, medium sweet Obodo, which is projected to hit the market in April in a move by the Government to sustain its crude offering.

Obodo has a gravity of 27.65°API and a sulphur content of 0.05pc, according to an assay seen by Argus. A source said the grade is likely to be priced in line with Nigerian medium sweet Bonga.

However, details on production levels were not immediately available.

The Nigerian independent Continental Oil & Gas will produce Obodo from onshore oil block OML 150 in the Niger delta region, and state-owned NNPC will market the crude, according to two sources.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) data shows Continental Oil has a stake in OML 150 under a production sharing contract — typically between the Government and a private company.

The newest Nigerian crude will add to a growing supply of medium sweet grades in the country.

The Nigerian National Petroleum Company Limited (NNPCL) restarted production of similar-quality Utapate in 2024, which followed the launch of Nembe in 2023.

The Nigerian medium sweets, including Forcados, Escravos and Bonga, have predominantly found an outlet in Europe, the largest market for Nigerian crude. Obodo could also find favour with European refineries, where seasonal maintenance is scheduled to wind down by the end of April and early May.

Nigerian grades have faced tepid demand in the April-trade cycle as ample availability of lower-priced alternatives such as US WTI, Caspian CPC Blend and other Mediterranean grades enticed European buyers.

The trade cycle has since shifted to May, with as many as 15 April-loading Nigerian cargoes still looking for buyers, according to market participants.

Nigeria’s upstream regulator NUPRC in March outlined a plan to add 1.07mn b/d  to the country’s liquids output by December 2026.

The plan forecasts an injection of capital into Nigerian oil blocks through joint ventures, production-sharing contracts and sole risk contracts.

Nigeria has struggled to mobilise upstream investment and has consistently fallen short of less ambitious production growth targets in recent years.

The country’s crude production fell by 4.5pc on the month to 1.47mn b/d in February, according to NUPRC just under its OPEC+ quota of 1.5mn b/d.