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Argentina continue buying Nigerian medium crude oil

Argentina refiners buy Nigeria crude, 2nd foreign cargo this year

Petroleumworld.com 05 19 2016

A 1-million-barrel cargo of Nigeria's Bonga medium crude oil is expected to be discharged in Argentina this week, the second crude import by firms operating in the South American country this year to secure oil supplies for their refineries, according to industry sources and Reuters data on Wednesday.

The new government of President Mauricio Macri is in talks between oil producers and refiners to make sure Argentina's total output of light crude is processed at domestic plants, lowering demand for imported oil.

But because of quality issues - Argentina has a surplus of heavy crude that is regularly exported, but it does not produce enough light grades - refining companies plan to import at least 3 million barrels of crude this year, mostly from Africa.

Suezmax tanker Front Njord, which loaded in early May at Bonga Offshore Terminal, will arrive this week in Argentina's Bahia Blanca port, according to Reuters vessel tracking data.

Several refinery operators in Argentina including Royal Dutch Shell arranged the purchase, the oil firm told journalist last week in Houston without providing more details.

A source from one of the refineries involved in the purchase added that Brazil's Petrobras, Argentina's Oil Combustibles and Axion Energy, partially owned by China's CNOOC , also participated in the deal to secure supplies.

Shell, Petrobras, Axion Energy and Oil Combustibles operate Buenos Aires, Bahia Blanca, San Lorenzo and Campana refineries with a joint capacity of some 260,000 barrels per day (bpd).

State-run oil company YPF, which operates Argentina's largest refining network, is not among the buyers of this cargo as it currently has a crude surplus, another source said.

Hoping to reduce costs, Argentina in 2014 lifted restrictions on crude imports to replace finished fuel purchases. Since then, it has been buying African grades.

The country produces some 520,000 bpd of crude and is a regular exporter of Escalante medium grade. In a new effort to cut invoices for imports, the government recently said it will reduce gas oil and liquefied natural gas purchases in the medium term, only keeping gas imports from Bolivia.

A 200,000-barrel cargo of rare Maria Ines light crude was exported last month from Argentina to drain inventories that were not bought domestically by YPF, Argentina's Energy Minister Juan Jose Aranguren said last week, warning about the effects of unsupervised light oil exports.

Story by Marianna Parraga and Juliana Castilla from Reuters; Reporting by Marianna Parraga in Houston and Juliana Castilla in Buenos Aires; Editing by Marguerita Choy and James Dalgleish.

reuters.com | 05 18 2016

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