NNPC Finalising $6bn Worth of Oil for Product Swaps

• NNPC Finalising $6bn Worth of Oil for Product Swaps

The Nigerian National Petroleum Corporation is in the final stage of signing $6bn worth of deals to exchange more than 300,000 barrels per day of crude oil for imported petroleum products, Reuters quoted sources with direct knowledge of the process as saying.

The NNPC called for tenders in January for the lifting of crude oil in return for the delivery and supply of petroleum products under the direct sale of crude oil and direct purchase of petroleum products model.

The contracts, which come three months later than expected, include three more pairs of companies than last year, reflecting the nation’s increased reliance on the NNPC for fuel imports.

Unlike the 2016 contracts, which included only companies with refineries in an effort to cut out middlemen, this year’s deal is said to include international trading houses and indigenous firms.

The latest list contains several companies from 2016, including Varo Energy, Societe Ivorienne de Raffinage, Total and Cepsa. Italy’s Eni and India’s Essar, which won 2016 contracts, are absent from this year’s list, while Socar and Mercuria are new additions.

The contracts were initially planned to begin in April but last year’s swap deals were extended at least twice in order to give the NNPC more time to negotiate.

The sources were quoted as saying that at least four of the 10 groups had signed contracts, set to begin from July 1, with the rest expected to do so by Friday (today).

The 10 groups, which comprise overseas refiners traders and local partners, are Trafigura and AA Rano; Petrocam and Rainoil/Falcon Crest; Mocoh and Heyden; Cepsa and Oando; SIR and Sahara; Mercuria and Matrix/Rahmaniya; Socar and Hyde; Litasco and MRS; Vitol and Varo; and Total.