Friday, October 19, 2012
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Friday, October 19, 2012

West African Market Faces Mixed Outlook
  • Indian demand for West African crude relatively lackluster.

  • Demand from Europe expected to increase.

  • Exports to Asia fall by more than 400,000 barrels per day in the third quarter.

Sellers of West African crude face a mixed picture for December loadings, with European demand for light, sweet fare expected to strengthen and uncertainty clouding the outlook for Angola's heavier, sweet crudes.

Nigeria's December program is due out next week, but as of Oct. 18, sellers had almost a dozen November loaders still to sell, including four cargoes of Bonny Light, three of Qua and two of Forcados.   

Support from India, whose tenders regularly provided a solid start to Nigeria's trading month for many years, is less reliable these days. Indian Oil Corp. (IOC) has so far taken only four cargoes for December: two Forcados, a Bonga and a Ghanaian Jubilee. Mangalore Refinery and Petrochemicals (MRPL) has booked one cargo of Zafiro, while Hindustan Petroleum Corp. (HPCL) held a tender for light sweets but declined to award any on price grounds. A key question is whether and when the Indians will return for more.

Signals from Europe -- which has replaced the US as Nigeria's biggest market -- are mixed (EIB Sep.28'12). The appetite for light, sweet crude is expected to increase, as European refineries wind down maintenance and work to meet robust winter fuel demand. Despite shrinking in recent weeks, refining margins are still relatively robust -- with an incremental barrel of Brent delivering profits of $8.77 per barrel at a Rotterdam cracker on Oct. 18.

However, it is not clear how much North Sea fare will be washing around ready to compete with Nigeria's. The Buzzard system is due back on stream this week, and deferred October loading cargoes from other fields could crowd North Sea November loaders, which compete with Nigeria's December cargoes. Asian buyers, however, have already mopped up six very large crude carriers of November-loading North Sea fare.

Angola's December outlook is cloudy for two main reasons. For one, supplies are plentiful. The country's schedule of 1.74 million b/d is the largest since August, thanks to the end of maintenance on some Block 15 fields. What is more, there are bearish signs in China -- Angola's largest customer and a key buyer of heavier West African sweets. The Asian juggernaut last week shut in 400,000 b/d of refining capacity to reduce pollution, prompting Unipec to reoffer several November-loading Angolan cargoes.  

While China's once insatiable buying has slowed in recent months, the country's traders are unpredictable. They spooked the market with a slow start for October but eventually bought 980,000 b/d from West Africa for the month -- up 60,000 b/d versus September. China bought only 640,000 b/d of Angola's September loaders -- down considerably versus the 860,000 b/d for August. But it took more from other West African countries (see table below).

The upcoming impact on prices is tricky to gauge before trading starts. Angolan differentials have already suffered a correction in recent months that has sliced $1.50 off the price tag for heavier barrels like Girassol and Dalia -- and it's not clear if they have much further to fall.

Differentials for Nigeria's flagship November loaders strengthened relative to October's. This is reflected in Nigerian National Petroleum Corp.'s (NNPC) new official selling prices announced on Oct. 18 for November cargoes. NNPC has raised the differential for Qua Iboe, Bonny Light and Brass by 10¢ to dated Brent plus $1.80. It also boosted Forcados and Escravos by 20¢ and 15¢ to dated Brent plus $3.20 and plus $1.85, respectively. The discount on Agbami and Akpo was reduced by 20¢ to dated Brent minus 80¢. Yet without clear signals from Asia, it is difficult to tell whether the trend will continue.

September Cargoes

Turning to September, West African exports fell to 4.485 million b/d. This reflected lower output in Angola -- where Exxon shut part of Block 15 for maintenance and technical glitches forced Total to cut back at the Girassol program from Block 17. Nigeria reduced supplies of Bonny Light, following a fire on the Bomu Bonny Trunkline thought to have been caused by oil thieves.  

 

Estimated West African Crude Output
September 2012
Nigeria 2,018* Chad 95
Angola 1,566 Ghana 63
Eq. Guinea 297 Cameroon 40
Congo-B 216 Cote d'Ivoire 30
Gabon 160 Total 4,485

*In '000 b/d.

 

Sales to Asia tallied around 1.63 million b/d -- similar to August levels, and well up on July. However, average sales for the quarter dove to 1.54 million b/d -- the lowest this year. Exports to other destinations are much trickier to follow, due to the secrecy of the big trading houses and producers' reluctance to disclose destinations within their refining systems.

 

Estimated West African Exports to Asia
September 2012
('000 b/d) Nigeria Angola Other Total
China 0 640 283 923
India 222 158 53 433
Taiwan 0 127 0 127
Other 97 0 54 151
Total 319 925 390 1,634
Q3 Avg. 240 1,039 266 1,545
Q2 Avg. 492 1,125 371 1,968
Q1 Avg. 502 1,115 310 1,942

Totals may not add due to rounding.

 

At this stage, Energy Intelligence Briefing has tracked 573,000 b/d with destinations in the US -- which includes only 160,000 b/d from Nigeria. While official data will likely disclose a higher figure, EIB's tally is consistent with the nosedive in Nigerian exports to the US since the beginning of 2012. EIB's data show that Nigeria is sending at least 414,000 b/d north to Europe while West Africa as a whole is dispatching at least 900,000 b/d.

Christina Katsouris, London

 

Estimated Nigerian Loadings for September 2012
Date Vol.* Seller Buyer Dest. Date Vol.* Seller Buyer Dest.
Abo 38.8°API, 0.14%S EA 34.8° API, 0.09%S
8-9 400 Vitol     16-17 950 Trafigura OMV Europe
25-26 400 Eni‡   Europe Erha 31.7°API,0.21%S,TAN=0.35
Agbami 47.2°API, 0.05%S,TAN=0.05 8-9 950 Shell Exxon  
›1-2 975 Taleveras BP   16-17 950 Shell CNOOC  
4-5 975 Chevron OMV Europe       Petronas Asia
8-9 975 Chevron Petrobras LA/Carib. 24-25 950 Exxon Glencore  
12-13 975 Statoil Petrobras LA/Carib.       Ancap LA/Carib.
16-17 975 Chevron Petrobras LA/Carib. Escravos 33.70°API, 0.16%S, TAN=0.52
20-21 975 Mercuria Vitol, IOC Asia 6-7 950 Chevron Phillips 66 US
24-25 975 Chevron‡   Aust/Asia 16-17 950 Chevron Sunoco US
28-29 975 Chevron Petrobras LA/Carib. 22-23 950 Trafigura Preem Europe
Akpo 46.2°API,0.06%S,TAN=0.05 29-30 950 Chevron Cepsa(t) Europe
2-3 1000 CNOOC Unipec   Forcados 30.43°API, 0.18%S, TAN0.34
      Exxon Europe 2-3 300 Arcadia Eni Europe
8-9 1000 Total Pertamina Asia 5-6 950 Shell Petrobras LA/Carib.
13-14 1000 CNOOC Mercuria   10-11 950 Trafigura   W.Afr.
      Petrobras LA/Carib. 16-17 950 Sahara   W.Afr.
19-20 1000 Petrobras†   LA/Carib. 21-22 950 Trafigura IOC Asia
26-26 1000 Taleveras M.Stanley   29-30 950 Shell BP  
      Exxon Europe Okono 40.7°API, 0.069%S, TAN=0.15
28-29 1000 Total Exxon   7-8 900 Sahara Chevron  
Amenam 40.70°API, 0.09%S, TAN=0.3 25-26 900 Taleveras Petrobras LA/Carib.
10-11 950 Vitol Petroineos Europe Brass River 34.56°API, 0.22%S, TAN=0.3
20-21 950 Taleveras Exxon   11-12 300 Vitol BP  
28-29 950 Total‡   Europe 15-16 350 Sahara SAR W.Afr.
Antan 28°API, 0.3%S,TAN=0.65 21-22 500 Conoco BP  
2-3 950 Taleveras M.Stanley         Petroineos Europe
      BP Europe 26-27 950 Eni    
20-21 950 Sinopec§ BP   Qua Iboe 35.22°API, 0.12%S, TAN=0.32
28-29 400 Glencore BP   2-3 950 Exxon Shell, IOC Asia
Bonga 29.00°API, 0.258%S, TAN=0.59 5-6 950 Glencore Cepsa Europe
6-7 950 Total Chevron   8-9 950 Vitol    
11-12 950 Glencore Exxon   11-12 950 Exxon Vitol, BP  
17-18 950 Exxon     14-15 950 Sahara Phillips 66 US
22-23 950 Sahara Chevron   17-18 950 Mercuria Chevron  
28-29 950 Shell‡     20-21 950 Vitol Pertamina Asia
Bonny Light 32.90°API, 0.16%S, TAN=0.19 24-25 950 Trafigura IOC Asia
± 950 Shell Petrogal Europe 26-27 950 Exxon IOC Asia
± 950 Total BPCL Asia 29-30 950 Exxon IOC Asia
± 950 Sahara Petroineos Europe Usan 32.6°API, 0.22%S,TAN=1.03
± 950 NNPC n/a   8-9 950 Exxon‡   USGC
± 600 Shell n/a   16-17 950 Socar Exxon  
Pennington 35°API, 0.08%S,TAN=0.22 23-24 950 Chevron
4-5 950 Chevron Petrobras LA/Carib. Yoho 39.30°API, 0.072%S, TAN=0.26
Okwori 37.2° API, 0.2%S 13-14 950 Exxon BP  
17-18 650 Unipec Petroineos Europe 25-26 950 Sahara Sunoco US

*In '000 bbl. ±Cargo thought to have lifted during the month, but actual day uncertain due to various date changes.
‡Equity lifter's refining system. †Co-loaded.


 

Estimated Angolan Loadings September 2012
Date Vol.* Seller Buyer Dest. Date Vol.* Seller Buyer Dest.
Cabinda 32.5°API, 0.12%S, TAN 0.06 Kuito 21.96° API, 0.74%S, TAN=1.85
5-6 950 Total BPCL Asia 11-12 920 Sonangol Petrogal Europe
10-11 950 Sonangol CPC Asia 27-28 920 Sonangol Unipec Asia
15-16 950 Chevron CPC Asia Mondo 28.9° API, 0.2%S,TAN=0.84
21-22 950 Eni Unipec Asia No cargoes due to maintenance
26-27 950 Sonangol Unipec            
      CPC Asia Nemba 38.67° API , 0.22%S, TAN=0.11
Dalia 23.90° API, 0.483%S, TAN=1.24 ›2-3 902 Sonangol Unipec Asia
4-5 950 Sonangol Shell Europe 6-7 960 Chevron Shell S. Afr.
8-9 950 Sonangol BP Europe 11-12 950 Sonangol IOC Asia
12-13 950 Sonangol Unipec Asia 16-17 950 Total Repsol LA/Carib.
17-18 950 Statoil Cepsa Europe 21-22 950 Sonangol Petrobras LA/Carib.
21-22 950 Sonangol Statoil US 25-26 950 Chevron Vitol
25-26 950 Sonangol Statoil US       Murphy Europe
29-30 950 Total Reliance Asia 29-30 950 Sonangol CPC Asia
Gimboa 23.67°API, 0.64%S, TAN=0.78 Palanca 37.20° API, 0.18%S,TAN=0.03%S
No cargoes 17-18 985 Somoil China Oil Asia
Girassol 29.9° API, 0.32%S, TAN=0.38 Pazflor 25.34°API, 0.39%S,TAN=1.86
6-7 1000 Sonangol Shell Europe 5-16 950 BP‡   USWC
11-12 1000 Sonangol Unipec Asia 9-10 950 Total Unipec Asia
16-17 1000 Sonangol Unipec Asia 14-15 950 Statoil CNOOC Asia
21-22 1000 Sonangol Exxon Europe 18-19 950 Exxon Valero Canada
27-28 1000 Sonangol Statoil Europe 23-24 950 Sonangol CNOOC Asia
Hungo 28.68°API, 0.63%S,TAN=0.54 27-28 950 Total Valero USWC
4-5 950 Exxon Sinochem Asia          
10-11 950 Sonangol Unipec Asia Plutonio 33.20° API, 0.36%S, TAN=0.15
18-19 950 Sonangol Unipec Asia 6-7 1000 BP Petrogal Europe
24-25 950 Statoil Sinochem Asia 11-12 1000 SSI Unipec Asia
30-01 950 Sonangol Vitol   16-17 1000 BP§ Unipec  
      IOC Asia 21-22 1000 SSI Unipec Asia
Kissanje 29.84° API, 0.38%S, TAN 0.57 26-27 1000 Sonangol Phillips 66 USEC
7-8 950 BP Unipec Asia          
12-13 950 Sonangol IOC Asia Saxi-Batuque 32.83° API, 0.32%S, TAN=0.64
18-19 950 Sonangol China Oil Asia 9-10 950 Sonangol Sunoco US
25-26 950 Exxon Unipec Asia 22-23 950 BP‡   S. Afr.

*In '000 bbl. ‡Equity lifter's refining system. ›Rescheduled to this date from earlier. §Swap.
 

Estimated Other West African Loadings September 2012
Date Vol.* Seller Buyer Dest. Date Vol.* Seller Buyer Dest.
Cameroon Equatorial Guinea
Kole 32.06°API, 0.33%S, TAN=0.5 New Zafiro 29.80°API, 0.258%S, TAN=0.81
9-13 800 Shell Unipec Asia 2-3 1,000 Exxon Sunoco US
20-25 400 SNH Sonara W.Africa 10-11 1,000 Gepetrol Glencore  
                Unipec  
Chad       Cepsa Europe
Doba 21.00°API, 0.095%S, TAN=4.31 19-20 1,000 GEPetrol Arcadia  
3-4 950 Petronas Sinochem Asia       Sunoco US
11-12 950 Chevron Sun US 28-29 1,000 Stag Exxon  
20-21 950 Exxon Reliance Asia Ceiba 30.10°API, 0.42%S, TAN=0.8
          2-3 1,000 Gepetrol Glencore  
Congo-Brazzaville       Unipec Asia
Djeno 27.36°API, 0.27%S, TAN=0.4 15-16 1,000 Hess Unipec Asia
4-5 920 Total‡   Europe 28-29 1,000 Hess Unipec  
10-11 920 Glencore Unipec Asia       Statoil Europe
15-16 920 Total‡   Europe Asseng
20-21 920 Trafigura Cepsa Europe 9-11 950 Glencore Phillips 66 US
25-26 920 Eni Sinochem Asia 22-25 950 Glencore Unipec Asia
30-01 920 Unipec Gunvor          
Nkossa 41.3°API,0.18%S, TAN=0.6 Gabon
16-17 950   Unipec Asia Rabi Light 35.10°API, 0.12%S, TAN=0.08
          1-10 650 Total Sunoco US
Ghana 23-24 650 Petrolin Sunoco US
Jubilee 37.6° API, 0.25%S,TAN=0.05 Rabi Blend
9-10 950 GNPC Unipec   7-9 670 Shell   Aust/Asia
      Petronas Asia 15-18 650 Shell MRPL Asia
21-22 950 Kosmos Vitol, BP   23-25 950 Shell Conoco USEC
          Etame
Cote D'Ivoire 24-30 550 Perenco Vitol USEC
Baobab Lucina
NA Oct<   Mitsubishi    
Espoir Oguendjo 34° API, 0.67%S, TAN=0.6
NA 29-30 680 Petrolin Exxon Europe

*In '000 bbl. ‡Equity lifter's refining system. ‹Delayed to later date.?