The Nigeria National Petroleum Corporation’s (NNPC) General Manager, Mele Kyari, said the company reduced the official selling price (OSP) of Nigeria’s crude oil grades as parts of a strategy to make Nigerian crude attractive to buyers and to help it regain its share of the global crude oil market, Vanguard reported.
NNPC lowered its OSP by at least $1/b for 20 out of 26 oil grades. NNPC cut the Qua Iboe’s OSP for November to a 0.17 cent premium to the benchmark Dated Brent from $1.07, while it reduced the price of Bonny Light to a seven cent premium and Forcados to a 41 cent discount to Dated Brent, according to Bloomberg.
The reductions took place as the Organization of Petroleum Exporting Countries (OPEC), of which Nigeria is a member, attempts to cut its combined output to a range of 32.5m to 33mb/d in an effort to steady oil markets. Nigeria has said it will be exempt from any production cuts, though final details of such an agreement have yet to be worked out.
Like every other producer country, Nigeria is grappling with prices that are less than half what they were in July 2014. What makes the African nation’s situation more acute is a militant campaign that resulted in export flows falling to the lowest in at least 9 years earlier 2016. Shipments are gradually resuming, and lower prices are a sign Nigeria is seeking to become more competitive in an already oversupplied global market.