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UPDATE 1-Vitol to supply Argentina with first Nigerian light crude import -sources
April 25, 2014 / 5:00 PM / 4 years ago

UPDATE 1-Vitol to supply Argentina with first Nigerian light crude import -sources

* Cargo to arrive in second week of May to Bahia Blanca port

* Argentina lifted restrictions on crude imports in January (Adds details of transaction, background on Argentina and West African countries)

By Marianna Parraga and Alejandro Lifschitz

HOUSTON/BUENOS AIRES, April 25 (Reuters) - Argentina’s state-run oil company YPF awarded a tender to buy a 1 million-barrel cargo of Nigerian Bonny Light crude to trading firm Vitol, sources close to the transaction told Reuters on Friday.

This marks the first time the South American country, which produces 700,000 barrels per day (bpd) of oil according to the U.S. Energy Information Administration, has agreed to buy Nigerian crude since it lifted restrictions on crude imports in January.

The measure was taken to buy cheaper crudes instead of importing more expensive finished fuels, the government said.

“The cargo will be delivered in the second week of May at Bahia Blanca port and then the crude will be distributed by Enarsa to several Argentine refineries, including Campana, La Plata and Buenos Aires,” one of the sources said.

Enarsa, another Argentine state-run oil company, will be in charge of receiving the cargo and will deliver the crude to refining companies. Axion Energy’s 90,000 bpd Campana refinery, the country’s fourth-largest, is undergoing a planned major maintenance.

YPF declined to comment and Vitol was not immediately available.

Traders expect the state-run company to keep buying light crudes to combine with local output of heavy and medium grades.

While Argentina’s oil output becomes heavier, as is the case in the rest of Latin America, it can now access cheap West African light crudes to feed domestic refineries and produce a larger volume of finished fuels such as gasoline and diesel.

Nigeria’s Bonny Light is a sweet crude with a density of 35 API degrees, produced by several foreign companies at the Niger Delta basin, including U.S. oil company Chevron Corp and Anglo-Dutch Shell.

West African countries including Nigeria are looking for new markets for their crudes since the growing domestic oil output in the United States reduced North American demand for light sweet crudes.

Switching from importing gasoline and another fuels to buying light crude would also save millions of dollars for Argentina, while its domestic crude production falls. In 2013, the country spent $14 billion on fuel imports, mostly liquefied natural gas (LNG).

Earlier this month, YPF launched two tenders to buy up to three 50,000 metric ton cargoes (some 375,000 barrels) of fuel oil to be delivered to Argentina’s electric market administrator for thermoelectrical production.

Editing by Matthew Lewis

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