The Nigerian National Petroleum Company Limited (NNPC) has announced the launch of a new crude oil blend, Utapate, marking a significant development in Nigeria’s oil sector.
The introduction of Utapate crude into the international market represents a strategic move by NNPC to diversify its offerings and strengthen its presence in global oil markets.
According to a statement released by Olufemi Soneye, the Chief Corporate Communications Officer of NNPC, the Utapate crude oil blend commenced operations in July 2024.
The first shipment of this new blend is en route to Spain, with Spanish oil giant Repsol securing the tender for this initial cargo.
Gulf Transport and Trading, a prominent player in the crude oil market, has also been awarded tenders for subsequent cargoes scheduled for August and September 2024.
The Utapate crude is sourced from Oil Mining Lease (OML) 13, located offshore Akwa Ibom State in Nigeria.
This region has long been a significant contributor to Nigeria’s oil production, and the introduction of the Utapate blend is expected to bolster the country’s oil export profile.
Currently, Utapate’s production stands at 28,000 barrels per day, with an anticipated increase to 50,000 barrels per day as operations ramp up.
One of the key attributes of Utapate crude is its low sulphur content, reported at 0.0655 percent.
This low sulphur content places Utapate in the “sweet” category of crude oils, which are generally preferred by refineries for their lower environmental impact and ease of refining.
This characteristic aligns with global trends towards cleaner energy sources and stricter environmental regulations.
NNPC’s move to introduce Utapate comes after a similar initiative in 2023 when the company launched the Nembe crude oil blend, produced in collaboration with Aiteo through the OML 29 Joint Venture.
Both Utapate and Nembe crude share similarities, including low sulphur content and reduced carbon footprint due to flare gas elimination.
These attributes make them attractive to European buyers who are increasingly seeking environmentally friendly and low-emission energy sources.
The introduction of Utapate is part of NNPC’s broader strategy to increase Nigeria’s crude oil production capacity and grow its reserves by developing new assets.
Crude oil is categorized based on its chemical properties, primarily its density and sulphur content.
Crude oil with a sulphur content of less than 0.5 percent is classified as “sweet,” whereas oil with more than 1.0 percent sulphur is considered “sour.”
The classification of crude oil is crucial for determining its market value and suitability for various refining processes.
The global oil market traditionally features several key benchmark grades, including West Texas Intermediate (WTI), Brent Crude, and UAE Dubai Crude.
However, numerous other crude oil blends, such as Utapate, also play significant roles in international trade.
The introduction of new grades like Utapate helps diversify the options available to refineries and buyers, contributing to the fluid dynamics of global oil trading.
The launch of Utapate aligns with Nigeria’s strategic objectives to maximize the economic benefits from its oil resources.
With its substantial reserves and production capabilities, Nigeria remains one of Africa’s leading oil producers.
