There are indications that the Nigerian National Petroleum Corporation (NNPC) may announce the names of companies qualified for the lifting of the country’s crude oil for 2017 by mid-December. The revelation was contained in a statement credited to Mele Kyari, NNPC’s Group General Manager, Crude Oil Marketing Division, NNPC.
According to a report by Platts, Kyari, in the statement, said “The crude tender will close on November 24 and we expect to have new contracts in place before the end of the second week of December.”
Known as crude oil term contracts, it involves the export of around 1.17 million b/d of the nation’s crude, out of the 2.2 million b/d the country produces. They are then sold by contract holders to end-users, refiners and other buyers. Last month, NNPC issued guidelines for companies wishing to participate in the lifting of Nigerian crude for next year.
According to the offer document, bids for these contracts, valid for a year from January 1, are to be submitted by 12:00 Nigerian time (1100 GMT) November 24.
Currently, 27 companies are involved in the 2016 crude term contracts, including both local and foreign companies.
Oil groups Total, Shell and ExxonMobil, trading firms Trafigura and Vitol, India’s IOC and HPCL, China’s Sinopec, and indigenous trader, Sahara Energy, are current term contract holders.
Industry sources revealed that the 2017 term contracts could see more indigenous and domestic Nigerian companies added to the list in the light of renewed violence in the oil-producing Niger Delta region.
“We could also see domestic Nigerian companies getting a larger slice of the pie,” an industry source said.
Traders said NNPC’s term contracts are always a tough one to call. “The NNPC term deals are totally unpredictable? There is zero pattern (between the previous ones). The submission date is November 24? I guess it will take two to three weeks (after that),” said a trading source from a company that is a 2016 NNPC term contract holder.