The crude oil game is changing….
The largest markets for crude oil was America, Asia and the EU…US now exports oil, EU largest economy Germany is turning to renewables, Europe as a whole are looking at renewables. Asia, especially India remains a key market for crude oil, the largest refinery in the world is in India.
The USA was Nigeria market, we have now lost that market, we have shifted to Asia, and India is now the largest buyer of Nigerian crude. The problem is that India is also the largest market for Saudi Arabia crude oil exports, in effect, Nigeria is in competition with the Gulf States to win markets in India, South Korea etc
We will lose this oil competition with the Middle East, and it’s not because our product is inferior, far from it, our crude oil is the best in the world. We will lose because our NNPC is slow, inefficient and incapable of doing big, strategic things.
I explain
As reported by Bloomberg Business, Korea’s Onsan Refinery is the third largest in South Korea, its owned 65% by Saudi Arabia via Saudi Arabian Oil Co (Saudi NNPC).
The Saudi’s have a 15% stake in a refinery in Japan, they own 25% of a refinery in Quanzhou China. Even in Indonesia, Saudi Arabia have a preliminary agreement to invest in a refinery.
Kuwait has stake in a refinery in Vietnam
Oman owns 50% has a refinery in India
The Middle East oil exporters strategy is simple, build or invest in refineries in Asia, the refineries then import crude oil from the Middle East. Our strategy is to offer discounts on our oil.
In effect, the Gulf States have built infrastructure to ensure their crude oil is bought, Nigeria is hoping a cheaper price will spur buying.
The facts say our strategy has failed as we have lots of unsold cargoes in Asia. Reuters reports “About ten November 2015 cargoes are still available, on top of about two-thirds of December's loading schedule which was set at 62 cargoes.”
Building refineries is not exactly new strategy by the Middle East oil exporters, Saudi Arabia owns refineries in Texas and Louisiana. Those processing facilities imported 65m barrels of Saudi Arabian crude in 2015 as at August 2016.
So as Nigerian exports of crude oil to the US has dropped, Saudi Arabia is still selling 65m barrels to the US…why? The Saudi own major states in the refineries and those refineries then import their own crude. The same thing will happen in Asia to our detriment.
Why has NNPC not been able to copy what the Gulf States are doing? Even in West Africa?
Nigeria has been unable to strategically export our oil by investing in the value chain of crude oil sales. We even sell our oil via agents on “spot’. We are unable to invest in refineries in Benin, Togo, Cameroon even ECOWAS to ensure we can sell Nigerian crude and control these markets….don’t be surprised Kuwait will come and invest in a refinery in Cameroon.’
We can do better…it’s our problem, we can fix it.
The largest markets for crude oil was America, Asia and the EU…US now exports oil, EU largest economy Germany is turning to renewables, Europe as a whole are looking at renewables. Asia, especially India remains a key market for crude oil, the largest refinery in the world is in India.
The USA was Nigeria market, we have now lost that market, we have shifted to Asia, and India is now the largest buyer of Nigerian crude. The problem is that India is also the largest market for Saudi Arabia crude oil exports, in effect, Nigeria is in competition with the Gulf States to win markets in India, South Korea etc
We will lose this oil competition with the Middle East, and it’s not because our product is inferior, far from it, our crude oil is the best in the world. We will lose because our NNPC is slow, inefficient and incapable of doing big, strategic things.
I explain
As reported by Bloomberg Business, Korea’s Onsan Refinery is the third largest in South Korea, its owned 65% by Saudi Arabia via Saudi Arabian Oil Co (Saudi NNPC).
The Saudi’s have a 15% stake in a refinery in Japan, they own 25% of a refinery in Quanzhou China. Even in Indonesia, Saudi Arabia have a preliminary agreement to invest in a refinery.
Kuwait has stake in a refinery in Vietnam
Oman owns 50% has a refinery in India
The Middle East oil exporters strategy is simple, build or invest in refineries in Asia, the refineries then import crude oil from the Middle East. Our strategy is to offer discounts on our oil.
In effect, the Gulf States have built infrastructure to ensure their crude oil is bought, Nigeria is hoping a cheaper price will spur buying.
The facts say our strategy has failed as we have lots of unsold cargoes in Asia. Reuters reports “About ten November 2015 cargoes are still available, on top of about two-thirds of December's loading schedule which was set at 62 cargoes.”
Building refineries is not exactly new strategy by the Middle East oil exporters, Saudi Arabia owns refineries in Texas and Louisiana. Those processing facilities imported 65m barrels of Saudi Arabian crude in 2015 as at August 2016.
So as Nigerian exports of crude oil to the US has dropped, Saudi Arabia is still selling 65m barrels to the US…why? The Saudi own major states in the refineries and those refineries then import their own crude. The same thing will happen in Asia to our detriment.
Why has NNPC not been able to copy what the Gulf States are doing? Even in West Africa?
Nigeria has been unable to strategically export our oil by investing in the value chain of crude oil sales. We even sell our oil via agents on “spot’. We are unable to invest in refineries in Benin, Togo, Cameroon even ECOWAS to ensure we can sell Nigerian crude and control these markets….don’t be surprised Kuwait will come and invest in a refinery in Cameroon.’
We can do better…it’s our problem, we can fix it.
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