Nigeria has lost its status as Africa’s biggest exporter to Asia, particularly the China to Angola and this is coming as the latest oil and gas outages by oil giants, ExxonMobil and Shell continues to reduce Nigeria’s production, denting the nation’s reputation as a reliable energy supplier.
Exxon warned customers of supply disruptions from Nigeria’s biggest oil stream Qua Iboe on Thursday, and Shell said gas supplies to one of the world’s largest liquefied natural gas terminals would be delayed. Both are due to pipeline damage.
Nigeria’s oil has been highly sought after for decades by the United States because it is easier to refine into gasoline, but the world’s biggest economy is increasingly serving its fuel needs domestically.
Asian buyers have a far greater choice of oil producers in Africa than a few years ago, especially Nigeria’s West African neighbour Angola, which often provides China with more oil than Nigeria.
“The timing of the force majeure on Exxon Mobil’s Qua Iboe oil grades could not be more stark,” said Rolake Akinkugbe, head of oil and gas research at Ecobank, a leading West African bank.
“Nigeria’s first quarter in oil cargo market has already suffered a slump in demand mostly from North American and Asia.”
The demand for imports is falling in the United States and Asia has an increasing choice of suppliers.
The latest outages follow a raft of problems at the end of last year when four oil majors – Shell, Exxon, Total and Eni – announced outages due to rampant oil theft and the worst floods Nigeria has seen in 50 years.
Ecobank estimates in the last year that oil theft and pipeline vandalisation cost Nigeria up to $7 billion in revenue from its two million barrel per day crude export business.
Exxon said despite declaring force majeure – an inability to fulfill contracts due to unexpected events – on Qua Iboe exports, which can reach 400,000 bpd, it continued to produce the benchmark grade and the export terminal was open.