February 28, 2023

WWW.ENERGYINTEL.COM

West Africa's April Trade off to Slow Start

  • Angolan crudes have come under pressure in the Chinese market from cheaper Brazilian and Guyanese grades.
  • Angolan trades adjusted more to European timetable.
  • Nigeria increasingly challenged by US and Mediterranean crude in Europe.

After a strong performance in March, and in anticipation of stronger demand from China and a scarcity in Europe, sellers of West African crude hiked offer prices for April cargoes. However, trade has been slow as refiners have so far dismissed West African crude as overpriced relative to offerings from other regions.

As of Feb. 27, Nigeria still had 15-20 March-loading cargoes to sell as it released April programs. Angola had cleared nearly all its March fare but had yet to get much traction in April spot trading.

Estimated West African Exports, January 2023
('000 b/d)Vol.
Angola1,208
Cameroon31
Chad123
Congo (Brazzaville)179
Congo (Kinshasa)0
Cote d'Ivoire6
Equatorial Guinea52
Gabon164
Ghana153
Nigeria*1,403

Angola Boosts Export Program

Angola’s strong performance with March loaders reflected a short 29-cargo program, a slight pickup in Chinese buying after Beijing ended its draconian zero-tolerance Covid-19 policy and Europe braced for the end of Russian crude imports. Differentials strengthened by around $1 per barrel, lifting sentiment after a very weak start to the year.

This emboldened sellers to hike offers further for April cargoes, with Sonangol quoting Girassol at dated Brent plus $3.20/bbl — up from dated plus $1.70/bbl for March. Sonangol has also offered Cabinda at dated plus $3/bbl and Dalia at dated plus 20¢/bbl. The offers are well above the assessments of price reporting firms, which last week tagged Girassol at dated Brent plus $1.80/bbl and Cabinda at dated plus $1.30/bbl. Sonangol had yet to sell its cargoes as Oil Markets Briefing went to press.

Traders attribute the lackluster trade to Angola’s larger program of 36 cargoes, a bounce in freight costs and an expected hike in refinery maintenance in May and June when March/April cargoes would arrive in China. The cost of a very large crude carrier to Asia tallies around $4/bbl — up from $3/bbl a month earlier, and the market remains in backwardation, which discriminates against longer-haul crudes.

China Balks, for Now

At the same time, for all the talk of a post zero-Covid-19 rebound, Chinese traders are splashing more of their cash outside West Africa. “They have come back a bit, but there’s no avalanche of buying as they are still scouring the world looking for the cheapest options,” says one Angolan seller.

Some wonder whether the shift is ephemeral or longer term. Much will depend on pricing and demand in Europe, which took some of Angola’s crude during China’s lockdown.

For many years, Chinese traders set the tone for Angola’s spot sales, with distance prompting them to buy early along with a willingness to pay more than European refiners who struggled to match. Sonangol tended to release programs mid-month, and sellers worried if cargoes took longer than a couple of weeks to clear.

But that picture is now changing. Angola currently trades later and more in tune with European buying patterns.

Angola sold around 342,000 barrels per day to Europe in January — much of it into the Mediterranean (see table). That’s twice as much as average exports to Europe in 2022. To be sure, the January-loading cargoes traded in November when China was in full lockdown and Angola’s market was at its weakest.

“It worked into Europe in January either because it was very cheap or it couldn’t sell elsewhere," quips one refiner, who argues that Chinese buyers, who take at least 300,000 b/d on a term basis each month, will always be interested in Angola and will return to driving the spot market.

Others aren’t so sure as China now has many options elsewhere. Chinese refiners are particularly partial to Brazilian Tupi and have been heard extolling the virtues and price competitiveness of Buzios, Sapinhoa and crudes from Guyana like Liza. “Brazil, Guyana and the US are all cheaper (than Angola),” a Chinese refiner told Energy Intelligence.

West African Exports to Asia, January 2023
('000 b/d)NigeriaAngolaOtherTotal
China63556255874
India626131154
Taiwan031031
Indonesia920092
Japan0000
Other*639431188
Total2807423171,339

Nigeria Pushed Aside

Nigerian fare has traded slowly for several reasons. Firstly, India, Nigeria’s main Asian market, has been taking more discounted Russian crude in recent months. This has reduced buying from Nigeria and other African producers.

Weaker gasoil cracks are limiting willingness to pay for middle-distillate-rich Forcados. The latter is now quoted at dated Brent plus $4.50/bbl, down from a lofty dated plus $6/bbl quoted earlier.

Nigeria is being crowded out in Europe by cheaper light, sweet grades from elsewhere, including abundant flows of US West Texas Intermediate, a buildup of distressed cargoes of Azeri Light, and ample supplies of Libyan crude.

At the same time Nigerian National Petroleum Corp. (NNPC) has been injecting unscheduled cargoes into the program and increasing supply. NNPC injected up to four cargoes in March, according to one trader, including one stem of Brass.

NNPC raised official selling prices for March, hiking flagship Forcados by 61¢/bbl to dated Brent plus $1.86/bbl, Escravos by 40¢ to dated plus $1.85/bbl and Qua by 32¢ to plus $1.27/bbl.


Estimated Nigerian Loadings, January 2023
DateVol. ('000 bbl)SellerBuyerDest.
Abo 38.8° API, 0.14%S, TAN=0.98
18-19600Eni‡ Europe
Agbami 48.28° API, 0.04%S, TAN=0.05
9-10975EquinorCepsaSpain
19-20975ChevronSK OilS. Korea
29-30975FamfaExxonThailand
Akpo
11-121,000CNOOCUnipecChina
24-251,000Prime Shell
Total
CepsaSpain
Amenam 39.4° API, 0.1%S, TAN=0.30
5-6950Total‡ France
15-16950NNPC-Duke-MercuriaTotalFrance
24-25950Total DeltaUSEC
Antan 28° API, 0.3%S, TAN=0.34
No info
Anyala Madu
10-11650NNPC-ATC Coolspring
Glencore
CepsaSpain
24-25650NNPC-Vitol†DeltaUSEC
Bonga 29.39° API, 0.25%S, TAN=0.46
§5-6950NNPC-BonoP66
ExxonTrieste
>19-20950NNPC-OandoGlencore
Mercuria
TotalEurope
30-31950ShellIrvingCanada
Bonny Light 35.09° API, 0.15%S, TAN=0.25
5-6950NNPC-Duke Rotterdam
< Total
Brass River 40.1° API, 0.18%S, TAN=0.13
4-5950NNPC-VitolBPRotterdam
EA 35° API, 0.09%S, TAN=0.13
> 30-31950ShellBPRotterdam
Egina 27.3° API, 0.165%S, TAN=0.24
7-8950CNOOCPetroineosChina
16-17950SapetroShell
Total
SIRC'Ivoire
26-27950NNPC-SaharaPaz OilIsrael
Erha 35.4° API, 0.18%S, TAN=0.13
§8-9950NNPC-MatrixMocoh
Mercuria
§21-22 DeltaUSEC
950NNPC-SaharaSARSenegal
Escravos 32.4⁰ API, 0.17%S, TAN=0.56
>8-9950ChevronPertaminaIndonesia
>14-15950NNPC-EyrieBP
RepsolSpain
>19-20950NNPC-OandoVitol
ExxonEurope
>26-27950NNPC-MatrixATC
Total
PertaminaIndonesia
Forcados 31.5⁰ API, 0.22%S, TAN=0.33
2-3950NPDC-EyrieEquinor
Total
PreemGothenburg
7-8997Shell/indig1TotalLe Havre
10-11950NPDC-SaharaSIR C'Ivoire
13-14950NNPC-MRSTotalS. Africa
17-18950NNPC-VitolCepsaSpain
20-21950NPDCPK OrlenEurope
24-25950NPDC-BonoP66USEC
28-29998Shoreline-VitolSIRC'Ivoire
Jones Creek 30.01° API, 0.35%S
20-21950VitolExxonEurope
Okwori
No info
Okwuibome 35.39° API, 0.02
10-11950SterlingVitol
DeltaUSEC
25-26950SterlingVitolUSEC
Otakikpo
26-27530Amni Fos
Pennington
16-17950NNPC-BP Senegal
Qua Iboe 37.6° API, 0.11%S,TAN=0.33
5-6950ExxonIOC†India
9-10950NNPC-MercuriaExxonEurope
14-15950ExxonPertamina†Indonesia
18-19950NNPC-AmshafaBP
IOCIndia
23-24950NNPC-DukeTotalLe Havre
29-30950ExxonRepsolSpain
Usan 29⁰ API, 0.27%S, TAN=1.53
13-14950ChevronExxonFos
Yoho 40.5o API, 0.06%S, TAN=0.23
20-21950NNPC-AmshafaBP
P66USEC

Estimated Angolan Loadings, January 2023
DateVol. ('000 bbl)SellerBuyerDest.
Cabinda 32.2° API, 0.15%S, TAN=0.11
3-4950ChevronUnipec†China
15-16950SonangolGlencore
AstronS. Africa
24-25950ChevronTotalEurope
Clov 33.17° API, 0.25%S, TAN=0.54
3-41,000BPCepsaSpain
13-141,000Sonangol Sinochem (t)China
23-241,000TotalChevron
Unipec†China
31-011,000EquinorTotalEurope
Dalia 23.4⁰ API, 0.49%S, TAN=1.54
6-7950TotalRongshengBrunei
15-16950SonangolSinochem (t)†China
23-24950SonangolRepsolSpain
31-01950Total
Gimboa 25.3° API, 0.56%S, TAN=0.65
No cargoes
Gindungo 32° API, 0.58% S, TAN=0.54
22-23950GalpShell
Total
SinochemChina
Girassol 30.21° API, 0.34%S, TAN=0.39
11-121,000TotalPTTThailand
24-251,000SonangolExxonEurope
Hungo 29.4° API, 0.59%S, TAN=0.46
14-15950SonangolSinochem (t)†China
Kissanje 30.3° API, 0.36%S, TAN=0.51
3-4950SonangolSinochem (t)†China
21-22950Exxon‡ Europe
Mondo 27.5° API, 0.438%S, TAN=0.922
No cargoes
Mostarda
7-8950TotalUnipec†China
15-16950SSI-UnipecRongshengChina
23-24950SonangolRepsolSpain
30-31950SonangolExxonEurope
Nemba
6-7950ChevronUnipec†China
13-14950EniUnipec†China
21-22950SonangolIOC (t)India
30-31950Chevron‡ USWC
Olombendo 35.2° API, 0.12%S, TAN=0.11
7-8950SonangolSinochem (t)China
27-28950EniExxonEurope
Palanca 37.2° API, 0.18%S TAN=0.03
no cargoes
Pazflor 24.7° API, 0.4%S,TAN=1.63
3-4950SonangolUnipec (t)†China
14-15950TotalPetroineos
ExxonEurope
25-26950TotalShell
Chevron†S. Korea
Plutonio 33.2° API, 0.37%S, TAN=0.12
3-41,000BPP66USEC
17-181,000SonangolUnipec (t)†China
Sangos 31⁰ API, 0.6%S, TAN=0.29
10-11950SonangolUnipec (t)†China
25-26950EniUnipecChina
Saturno 27.6° API, 0.8%S, TAN=0.53
4-5950EquinorIOCIndia
17-18950SonangolSinochem (t)†China
31-01950SSI-Unipec China
Saxi-Batuque 34.6° API, 0.25%S, TAN=0.59
1-2950ExxonCPCTaiwan
23-24950SonangolValeroUK
Estimated Other West African Loadings, January 2023
DateVol. ('000 bbl)SellerBuyerDest.
Cameroon
Kole 32.06° API, 0.33%S, TAN=0.5
18-22950SNHShell
Glencore S. Africa
Lokele
No info
Chad
Doba 25.85° API, 0.09%S, TAN=2.23
3950 UniperRotterdam
10950CNPCChina OilChina
18950 UniperRotterdam
26950 VitolUAE
Congo (Brazzaville)
Djeno 27.6° API, 0.341%S, TAN=0.69
5-6920TotalMubadalaBrazil
10-11920SNPC-TrafiguraUnipecChina
15-16920TotalZhenHua
LuqingChina
19-20920SNPC-PetracoUnipecChina
24-25920ChevronIOCIndia
Nkossa 39.92° API, 0.06%S, TAN=0.05
25-26950LukoilValeroUK
Congo (Kinshasa)
Coco
No cargoes
Cote d'Ivoire
Baobab
2-3200PetrociAugusta Energy
Shell
ValeroUK
Espoir
No info
Equatorial Guinea
Aseng
14-15650NobleGlencore
SarasItaly
New Zafiro 30.2° API, 0.25%S, TAN=0.74
No cargoes
Ceiba
21-22950KTEGIBP
UnipecChina
Gabon
Rabi Light 33.2° API, 0.14%S, TAN=0.08
3-4950Maurel & PromUnipecChina
17-18950TullowShell†Asia
Rabi Blend 34.10° API, 0.06%S
14-15650AssalaShell
Mandji
11-12450PerencoUnipecChina
20-21450PerencoUnipecChina
28-29450PerencoUnipecChina
Etame 35.21⁰ API, 0.06%S, TAN=0.2
10-11650VaalcoGlencore
SarasItaly
Lucina
7-8530 Cepsa†Spain
Oguendjo 34⁰ API, 0.67%S, TAN=0.6
No cargoes
Dussafu
No info
Ghana
Jubilee 36.75° API, 0.29%S, TAN=0.05
6-7950TullowPetrogalPortugal
17-18950KosmosGlencore
UnipecChina
29-30950TullowGlencore
PetrogalPortugal
Sankofa 28° API, 030%S, TAN=0.08
26-27950EniExxonEurope
Ten 33.0° API, 0.43% S, TAN=0.05
27-28950TullowKosmos
Glencore
Chevron (s)USWC

Christina Katsouris, London