Argentina’s refiners buy Nigerian crude as second foreign cargo of 2016

By Marianna Parraga and Juliana Castilla

HOUSTON/BUENOS AIRES, May 19 (Reuters) -- A 1-MMbbl 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 MMbbl 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 journalists 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 the Buenos Aires, Bahia Blanca, San Lorenzo and Campana refineries with a joint capacity of some 260,000 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-bbl 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.