By Amechi Ogbonna with agency report
The Nigeria National Petroleum Cooperation (NNPC), has unveiled names of 39 companies that would lift and trade Nigeria’s oil for the 2017 crude oil term contract.
The list containing 39 companies chosen from 224 applicants which participated in an open bid last year released on Tuesday night, includes 18 Nigerian companies, the two NNPC trading companies and other international trading companies.
According to NNPC in A statement, the contract will run for one year, effective January 1, 2017, for consecutive 12 circles of crude oil allocation”.
Listed among the traders are 18 Nigerian companies, 11 international traders, five foreign refiners, three NOCs and two NNPC trading arms. All the contracts are for 32,000 bpd except for Duke Oil Ltd, a subsidiary of NNPC, which shall be for 90,000 bpd.”
At the open bid in November 2016, Maikanti Baru, Group Managing Director of NNPC, said the number of bidders for the contract dropped from 278 that applied for the contract in 2015 due to the new requirements introduced by the corporation. Baru said at the time that the process, which prioritised refiners and big crude oil lifters, would be concluded in February 2017.
“When we sell this crude oil, the money goes straight to the Central Bank of Nigeria (CBN) account on behalf of the federation. NNPC does not operate any of those accounts,” he had said, projecting transparency.
“The best inputs from the NNPC is confirmation that the money has been paid but we have no signature rights on this account, contrary to the perception that NNPC is hoarding some money on behalf of the Nigerian people; all the crude oil we sell goes to the Nigerian people. There is nothing that is hidden, it is all open for everybody to see.”
Meanwhile, as crude oil prices continued rallying towards $60 per barrel, tenders transactions appear to dominate trading at the spot market. Spot deals were limited in the first full trading day of 2017, while the crude oil futures contracts on which Nigeria’s oil is priced were notably volatile.
Several pending tenders tied up some seller interest, with Indian firms IOC and BPCL running buying tenders. Crude oil futures traded at 18-month highs before crashing more than $1 per barrel below the previous close due to a resurgent US dollar and questions surrounding Organisation of Petroleum Exporting Countries’ (OPEC)’s plans to cut production.
Traders expect Saudi Arabia to raise its official selling prices to Asia, which could help West African grades compete for buyers in the region. Spot buying demand was all but absent, with those holding Nigerian cargoes targeting tender buyers in India.
Loading delays plagued ExxonMobil’s production after workers in Nigeria staged industrial action late last year while February loadings were impacted by the delays, and stood at 1.58 million bpd. Four planned cargoes of Akpo condensate were not included in the total. Awards for 2017 contracts are expected any day. Just under two dozen caargoes from the February programme were still looking for buyers, though analysts said heavy crude oil producers such as Angola could benefit most from OPEC production cuts.
Indian refinery IOC and BPCL had issued tenders to buy crude oil that is expected to close later this week. Approved grades include both Nigerian and Angolan crudes.