February 2, 2023

WWW.ENERGYINTEL.COM

West African Trade Perks Up on Chinese Demand, EU Ban


  • West Africa oil trade is livening up after a slow start as Unipec nabs spot cargoes.
  • Sellers are hiking offer prices in anticipation of stronger demand from both Asia and Europe.
  • Competition from rival grades in the US and Brazil remain a salient challenge.

Sellers of March-loading West African crude reported a long-awaited uptick in sales this week at stronger differentials. There has been a pickup in Chinese buying after the Lunar New Year holiday, while Europe is readying for an expected surge in demand for distillate-rich grades ahead of the EU ban on Russian product imports.

As of Jan. 31, Angola had cleared around eight spot cargoes — more than half of the spot offerings from its 30-cargo March program.

Nigeria, which unveiled March cargoes last week, expects to do well, but information on actual trades is thin on the ground.

Improved Environment

The global market appears robust, underscored by expectations of reviving Chinese demand and strong crack spreads for diesel and gasoline.

While market conditions have improved for West African fare in particular, the uptick has been slower than expected.

The announcement of a cessation of the infamous "zero-Covid" policy in China, Angola’s main customer, was expected to ramp up demand for Angolan grades. Sellers anticipated that prompt Chinese interest would spur European refiners, concerned about a shortage of diesel, to the Angola market to pre-empt the Chinese. However, a brief buying spurt in mid-January fizzled out as Chinese buyers took a swath of Brazilian Tupi and then relaxed over their new year holiday without taking spot Angolan cargoes.

Interest picked up this week when Unipec took a spot cargo of Kissanje from Sonangol. The Angolan national oil company, which had three stems to shift this month, is thought to have sold a cargo of Mostarda to Total and held the third, of Girassol, back to offer into a tender.

Sonangol had reportedly offered the Girassol at dated Brent plus $1.70 per barrel, the Mostarda at dated minus $2.80/bbl, and the Kissanje at plus 40¢. It is not clear at what prices the cargoes changed hands, although buyers have confirmed Angolan differentials as noticeably firmer than for February cargoes. Price reporting firms had assessed the Girassol as flat to dated Brent during the past two weeks.

Estimated West African Exports, December 2022
('000 b/d)Vol.
Angola--
Cameroon42
Chad122
Congo (Brazzaville)209
Congo (Kinshasa)29
Cote d'IvoireNo info
Equatorial Guinea45
Ghana153
Gabon185
Nigeria*1,417

Benchmark Spreads

Narrower spreads between Brent, which is West Africa’s benchmark, and Dubai, to which rival Mideast grades are pegged, have made West Africa more competitive in Asia in recent months. This has been buoyed by low freight costs for long-haul vessels.

A very large crude carrier from West Africa to China has tallied roughly $2.80/bbl — down from $3/bbl last week and $4/bbl a month earlier.

This has piqued interest in South Asia, which continues to buy substantial volumes of Russian crude. India's IOC awarded a cargo of Usan to Exxon in its latest tender and a cargo of Akpo to China National Offshore Oil Corp.

West African Exports to Asia, December 2022
('000 b/d)NigeriaAngolaOtherTotal
China0--313--
India188--31--
Taiwan0--0--
Indonesia92--50--
Japan0--0--
Other*31--29--
Total311--423--

Nigerian Outlook

The picture in Europe, Nigeria’s main market, remains bullish but challenging. The upcoming ban on imports of refined products from Russia is expected to tighten diesel supplies and strengthen the market for West African grades with high yields of middle distillate products. These include Egina, often described as "liquid distillate," and Forcados.

These expectations encouraged sellers to hike offer prices way beyond February assessments and Nigeria's official selling prices (OSPs). Exxon was reported offering Erha at dated Brent plus $6/bbl this week, while Total offered a cargo of Forcados at dated plus $6.50/bbl last week. Others offered Qua Iboe at dated plus $3.50/bbl — up 50¢/bbl on week earlier levels — and Escravos at dated plus $5.50/bbl.

Nigeria faces competition from rival US crudes, which are supported by West Texas Intermediate’s strong discount to Brent. At the same time, freight rates for the Suezmaxes used to take crude from West Africa to Europe remain firm, while backwardation adds to on-water costs.

There is also a fair amount of rival crude sloshing around in the Mediterranean, where the price of Azeri’s BTC blend has dropped with knock-on effects for other light, sweet grades.

Nigerian National Petroleum Corp. released programs relatively late after fixing its OSPs to clear an overhang of February cargoes and reflect prices achieved in the market for February fare. It hiked the February OSP for Qua Iboe by 40¢/bbl to dated Brent plus 95¢/bbl, and Escravos by 35¢ to dated plus $1.45/bbl. Forcados went up by 33¢/bbl to dated Brent plus $1.25/bbl.

Estimated Nigerian Loadings, December 2022
DateVol. ('000 bbl)SellerBuyerDest.
Abo 38.8° API, 0.14%S, TAN=0.98
700NNPCNo info
Agbami 48.28° API, 0.04%S, TAN=0.05
6-7975ChevronPBFUSEC
17-18975ChevronIOC†India
Akpo
2-31,000TotalLeHavre
16-171,000CNOOCVitol
IOC†India
27-281,000TotalIOC†India
Amenam 39.4° API, 0.1%S, TAN=0.30
1-2950NNPC-MocohEquinor
DeltaUSEC
10-11950TotalDongesFrance
21-22950NNPC-Total Le Havre
29-30500ExxonCepsaSpain
Antan 28° API, 0.3%S, TAN=0.34
5-6500NNPC Rotterdam
Anyala Madu
13-14650NNPC-TotalShell†Rotterdam
27-28659NNPC-Vitol Le Havre
Bonga 29.39° API, 0.25%S, TAN=0.46
4-5950NNPC-SaharaShell†Europe
12-13950NNPC-OandoMercuriaLe Havre
21-22950NNPC-SaharaEquinorFrance
26-27950Shell France
Bonny Light 35.09° API, 0.15%S, TAN=0.25
950NNPC-PetracoNo info
950ShellNo info
Brass River 40.1° API, 0.18%S, TAN=0.13
No info
EA 35° API, 0.09%S, TAN=0.13
15-16700Shell Fos
Egina 27.3° API, 0.165%S, TAN=0.24
8-9950CNOOCTotal
PKN Portugal
>⌃950PrimeShell
PKN Gdansk
950NNPC-SaharaORLIsrael
29-30950TotalPertaminaIndonesia
Erha 35.4° API, 0.18%S, TAN=0.13
5-6950NNPC-Vitol Savona
30-31950NNPC-SaharaMercuria
SARSenegal
Escravos 32.4⁰ API, 0.17%S, TAN=0.56
4-5950ChevronRepsolPeru
10-11950NNPC-SaharaTotalKorea
16-17950ChevronNo infoPacific coast
22-23950NNPC-OandoGlencore
TotalNo info
Forcados 31.5⁰ API, 0.22%S, TAN=0.33
1-2700IndigIneosFinnart
5-6950NNPC-MocohCepsaSpain
9-10950NNPCSIRC'Ivoire
14-15950NNPC-BonoP66USEC
19-20!950NNPCMonroe EnergyUSEC
23-24750Shoreline-VitolCepsaSpain
27-28950Shell/indigPERNPoland
Jones Creek 30.01° API, 0.35%S
27-281,050NNPC-LeveneVitolBrazil
Okwori
5-6500NNPC-OandoSonatrachSicily
Okwuibome 35.39° API, 0.02
10-11950Sterling-VitolDeltaUSEC
29-30950VitolPertaminaIndonesia
Qua Iboe 37.6° API, 0.11%S,TAN=0.33
4-5950ExxonIOCIndia
10-11950NNPCAramco
PertaminaIndonesia
17-18950ExxonAncapUruguay
24-25950NNPCAramco
Mercuria
DeltaUSEC
28-29950NNPCTotalUSEC
Usan 29⁰ API, 0.27%S, TAN=1.53
2-3950ExxonIOCIndia
21-22950NexenVitol
IOCIndia
Yoho 40.5° API, 0.06%S, TAN=0.23
26-27950ExxonP66USEC
Estimated Angolan Loadings, December 2022
DateVol. ('000 bbl)SellerBuyerDest.
Cabinda 32.2° API, 0.15%S, TAN=0.11
14-15950SonangolSinochem (t)
PetrogalPortugal
27-28950ChevronPetrobrasBrazil
Clov 33.17° API, 0.25%S, TAN=0.54
4-51,000Exxon‡ France
13-141,000EquinorCepsaSpain
22-231,000TotalP66USEC
Dalia 23.4⁰ API, 0.49%S, TAN=1.54
3-4950SonangolCNOOCChina
11-12950SonangolSinochemChina
23-24950EquniorTotal
28-29950SonangolUnipec (t)China
Gimboa 25.3° API, 0.56%S, TAN=0.65
No info
Gindungo 32° API, 0.58% S, TAN=0.54
21-22950SonangolSinochem (t)China
Girassol 30.21° API, 0.34%S, TAN=0.39
2-31,000SonangolSinochem (t)
PTTThailand
14-151,000SonangolPTTThailand
26-271,000SonangolUnipec (t)China
Hungo 29.4° API, 0.59%S, TAN=0.46
1-2950SonangolSinochem (t)China
19-20950BPEniEurope
Kissanje 30.3° API, 0.36%S, TAN=0.51
12-13950EniUnipec (t)†China
Mondo 27.5° API, 0.438%S, TAN=0.922
29-30950ExxonSinochem (t)†China
Mostarda 28° API, 1.12%S, TAN=0.53
1-2950TotalUnipec†China
9-10950SonangolUnipec (t)†China
17-18950Exxon‡ Rotterdam
24-25950PetrogalExxonRotterdam
31-01950SonangolSinochem (t)†China
Nemba
10-11950Chevron IOC†India
23-24950SonangolSinochem (t)China
Olombendo 35.2° API, 0.12%S, TAN=0.11
7-8950SonangolSonaref Angola
20-21950SSIUnipec†China
Palanca 37.2° API, 0.18%S TAN=0.03
23-24600Maurel & PromGlencore†Italy
Pazflor 24.7° API, 0.4%S,TAN=1.63
12-13950Exxon‡ Rotterdam
23-24950Equinor Rotterdam
Plutonio 33.2° API, 0.37%S, TAN=0.12
4-51,000SIPCUnipecChina
17-181,000Sonangol IOCIndia
Sangos 31⁰ API, 0.6%S, TAN=0.29
12-13950EniUnipecChina
27-28950SSIUnipecChina
Saturno 27.6° API, 0.8%S, TAN=0.53
7-8950Sonangol Sinochem (t)China
20-21950Sonangol Sinochem (t)China
Saxi-Batuque 34.6° API, 0.25%S, TAN=0.59
5-6950Sonangol Exxon Savona
Estimated Other West African Loadings, December 2022
DateVol. ('000 bbl)SellerBuyerDest.
Cameroon
Kole 32.06° API, 0.33%S, TAN=0.5
6-7650PerencoGlencore
ShellEurope
Lokele
28-29650SHTUnipecChina
Chad
Doba 25.85° API, 0.09%S, TAN=2.23
1-2950CNPCVitolFujaira
9-10950GlencoreShellWilhelmshafen
17-18950PerencoGlencoreFujaira
23-24950PetronasIOCIndia
Congo (Brazzaville)
Djeno 27.6° API, 0.341%S, TAN=0.69
3-4920TotalUnipecChina
8-9920PerencoUnipecChina
13-14920SNPCUnipecChina
18-19920TotalMubadalaBrazil
23-24920ChevronUnipecChina
28-29920SNPC-CoralUnipecChina
Nkossa 39.92° API, 0.06%S, TAN=0.05
12-13950EniPetrogalPortugal
Congo (Kinshasa)
Coco
23-25900PerencoBPSingapore
Cote d'Ivoire
Baobab
30-31630No infoShellEurope
Espoir
no info
Equatorial Guinea
Aseng
1-3650GlencoreTamoilSardinia
New Zafiro 30.2° API, 0.25%S, TAN=0.74
no cargoes
Ceiba
25-26750GEPetrolSinochem
UnipecChina
Gabon
Rabi Light 33.2° API, 0.14%S, TAN=0.08
22-23950PerencoShell
PertaminaIndonesia
Rabi Blend 34.10° API, 0.06%S
11-12600AssalaShell
PertaminaIndonesia
24-25950AssalaShell
ORL Israel
Mandji
4-5450PerencoUnipecChina
13-14450PerencoUnipecChina
22-23450PerencoUnipecChina
30-31450PerencoUnipecChina
Etame 35.21⁰ API, 0.06%S, TAN=0.2
23-25475VaalcoGlencore
SarasEurope
Lucina
23-25320PerencoExxon
Oguendjo 34⁰ API, 0.67%S, TAN=0.6
No cargoes
Dussafu
11-15650BW OffshoreBP
ORLIsrael
Ghana
Jubilee 36.75° API, 0.29%S, TAN=0.05
1-2950TullowUnipecChina
14-15950GNPCLitasco
25-26950KosmosTrafigura
UnipecChina
Sankofa 28° API, 030%S, TAN=0.08
26-27950SankofaVitol
ValeroPembroke
Ten 33.0° API, 0.43% S, TAN=0.05
22-23950KosmosTullow
Glencore
P66USEC

Christina Katsouris, London