Traders said India would receive its first cargo of Saharan Blend crude this summer, with one million barrels sold for loading in July and another million barrels for August. Singapore Petroleum Company (SPC) also bought one million barrels of Saharan Blend for July loading. Traders said ExxonMobil Corp (XOM.N: Quote, Profile, Research) could also bring some Saharan blend crude for lifting in July for its Japanese oil refining unit TonenGeneral. "ExxonMobil may move one million barrels of Saharan to TonenGeneral," a Japanese trader said. Algerian state oil firm Sonatrach signed earlier this year a one-year contract with Chinese trader Unipec to supply two million barrels of Saharan Blend every quarter, traders said. Sonatrach sold its first Very Large Crude Carrier (VLCC) of the light sweet crude to the Chinese buyer in March, for loading in April. Sonatrach clinched its first term crude contract with an Asian customer around two years ago when it started selling Saharan Blend to Indonesia's Pertamina. It exports around one million barrels a month to Indonesia. Algeria need to expand its customer base as its crude production has risen rapidly. Production of Saharan Blend has surged by more than 500,000 bpd in the last four years and stands at around 1.25 million barrels per day (bpd), way above its OPEC quota. Algeria's OPEC output quota will stand at 830,000 bpd from August 1. The International Energy Agency last estimated Algeria's output at 1.20 million bpd in June, leaving 50,000 bpd of spare capacity. It is due to hit 1.5 million bpd by 2005, with Sonatrach controlling around half of the sales and foreign equity holders controling the rest. MEDITERRANEAN RIVALRY Sales to Asia have been made easier by the opening last year of a new export berth at Algeria's Arzew port. The new berth can accommodate VLCCs. The United States is Algeria's other big customer as the OPEC producer seeks to widen its export base. Exports for the January-May period this year have reached 193,000 bpd, against 48,000 bpd for the same period in 2003. As competition from other light sweet grades is rising in the Mediterranean, Algeria is poised to to seek more customers in distant regions outside of its traditional market. Exports of Kazakhstan's CPC Blend crude oil exports stand at 400,000 barrels this year against 200,000 two years ago. The crude, which is lighter but more sour, is less attractive than Saharan Blend and trades at a lower price. But its increasing production has forced Algeria to look for other markets. Neighbouring Libya is planning to raise its oil output capacity to 2.1 million bpd by 2009, from around 1.7 million bpd. The 2009 target might be seen as over-ambitious but oil companies are flocking to the North African country, which has been largely unexplored and where crude production is expected to increase to over 2 million bpd. Most of the Libyan crudes developed so far are light sweet grades and compete with Saharan Blend, especially after U.S. sanctions against Libya were lifted in April and U.S. refiners started importing Libyan crudes again. Libya is now producing about 1.7 million bpd. In the late 1970s, it was shipping more than 700,000 bpd of oil to the United States. PIN//Reuters