Canada’s Come By Chance Refinery buys Nigerian oil for first time in 10 years

Canada’s Come By Chance refinery, located on the eastern island of Newfoundland, has bought Nigerian oil for the first time in at least a decade, the latest addition to the facility’s diverse crude slate, according to Reuters customs data.

 

The purchases come as West African crude producers are courting new suitors in the face of weak demand from a U.S. market awash with cheaper, domestic crude.

The search for new buyers has forced West African producers to compete aggressively on price, so light sweet Nigerian crude grades like Qua Iboe are being heavily discounted relative to global benchmark Brent crude.

“I suspect the West African crude is priced to sell given the continuing reduction in U.S. imports of light sweet African crude,” said Sara Emerson, a managing principal at ESAI Energy.

The crude’s relatively cheap price has drawn interest from the 115,000 barrel-per-day Come By Chance refinery, according to a source familiar with the refinery’s operations.

The latest shipment arrived aboard a Bahamas-flagged ship named M.V. Jiaolong Spirit, which carried 1 million barrels of Qua Iboe crude that arrived at the refinery on May 27, according to vessel tracking data available on ThomsonReuters’ Eikon.

The refinery has made one additional purchase of Nigerian crude, according to the person familiar with the refinery’s operations who said future buys could be expected.

A spokeswoman for the refinery would not confirm the shipments and declined comment.

DIVERSE SLATE

The Nigerian deliveries are the latest sign of a new approach to crude supply by the recent owners of Come By Chance, a team of veteran oil traders including Neal Shear, former commodities banker at Morgan Stanley and ex-Lehman Brothers executive Kaushik Amin, who purchased the refinery in November.

They swapped the mainstay Iraqi crude for shale oil out of Texas and recently began buying White Rose crude pulled from offshore oil fields in close proximity in the northern Atlantic Ocean.

Shale oil is not a perfect fit for the refinery, which prefers a medium-sour grade, but the owners are willing to run at slightly reduced rates to take advantage of the competitive pricing for U.S. crude oil. The same goes for White Rose, which must be blended with other crudes before its processed.

The team negotiated a new supply and offtake agreement with BP Plc and overhauled operational management at the site.