Indian state-run oil refiners have called for Nigeria to increase its total term contract volumes next year by more than 20% as demand from the South Asian country climbs, an official from Nigeria’s state-owned Nigerian National Petroleum Corporation said.
This request comes a few weeks before Nigeria’s crude oil term lifting contracts for 2017 are finalized, which will be decided by mid-December.
India as the largest buyer of Nigerian crude, has always said it should have a longer-term arrangement with NNPC to ensure security of supply.
“Three Indian companies mentioned that they are looking for a combined total of 11 million mt [in 2017] from 9 million mt [this year],” Anibor O. Kragha, group executive director at NNPC, told S&P Global Platts in an interview on the sidelines of the Petrotech conference in New Delhi late Monday.
India is a significant buyer of Nigerian crude, which is largely light and sweet, rich in gasoline and diesel and low in sulfur, and meets the needs of Indian refiners.
State-owned refiners like Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd are major regular buyers of Nigerian crudes like Qua Iboe, Bonny Light, Escravos, EA Blend, Erha, Usan and Agbami.
A source from an Indian refiner told Platts that Nigerian crude is a must for most of its refineries, especially the older ones, which have been designed to run light sweet crudes.
“Despite all the militancy issues, we still buy Nigerian crude, as our refineries need it. We will continue to buy Nigerian crude, but we want them to supply us with more,” he said.
India, which is currently among the world’s fastest growing economies, has seen its gasoline and gasoil demand climb sharply over the past few years. This has encouraged Indian refineries to buy more Nigerian crudes.