|The value of Angolan crude
Not all oils are created equal, nevertheless despite fierce competition from Nigeria’s highly graded oils, Angolan oil sells well in the international markets. This performance can be exemplified by:
Cabinda and Nemba come from Block Zero, Angola’s most prolific area, at the mouth of the Congo River; Kuito comes from deepwater Block 14; Hungo, Xikomba, Kissanje, Mondo and Saxi-Batuque from deepwater Block 15; Dalia, Girassol and Pluotonio from Block 17 and from block 3 comes Palanca and Gimboa. For more information about the Blocks, please consult the concessions’ map.
Angola’s thirteen main grades of oil have quoted prices. Nemba, Girassol and Palanca are the best quality crude type (i.e. lowest content of sulphur and asphalt) and trade at a premium to Brent. Crude from Dalia, Kuito and Cabinda, with heavy content of sulphur and asphalt, normally trade at a discount to Brent.
Cabinda could be regarded as the benchmark Angolan crude and is a reference point for international markets. Platt’s, the commodities reporting company, considers Cabinda grade to be transparent and globally traded.
Although Sonangol E.P.’s own production is small; The oil that it trades represents its crude equity in Blocks in which it is a shareholder, as well as oil due to it through its role as concessionaire.
Generally Sonangol will sell around 30 to 35 cargoes per month, with each cargo typically comprising almost a million barrels. Nowadays Sonangol has the ability to choose its own clients, and we choose people who are end users rather than traders.
The US, the world’s largest oil consumer, is still the biggest purchaser of Angolan crude, but China has moved into second place, with demand from Asia growing rapidly.
Trading Angola’s varied grades of oil – there are thirteen different ones whose properties depend upon the field from which they come – is a matter of seasonal requirement as well as the specifics of local demand.