2012/2013 crude oil lifting contracts
The Nigerian Federal Government, through the Nigerian National Petroleum Corporation (NNPC), has decided to award nearly half of 2012/2013 crude oil lifting contracts worth $60 billion to Nigerian companies and in the process, downsizing contracts awarded to international oil traders.
In the past, foreign traders such as Glencore, Trafigura, Vitol, Arcadia, Addax and Glencore dominated crude contracts.
Reuters reported yesterday that the NNPC allocated about three-quarters of its daily production or around 1.6 million barrels per day (bpd) via term contracts to 50 companies, including 21 Nigerian firms.
According to the news agency, the number of companies on the list grew from last year’s 45 to about 65, with many Nigerian companies making the list, the document showed.
It was further stated that the number of companies allotted crude oil lifting contracts has increased two-fold in the last five years.
Crude oil to be lifted in 2012/2013, which is put at some 580 million barrels sold over the next 12 months, is valued at nearly $60 billion based on current premiums of the country’s light, sweet crude to Brent futures.
The tender result,showed that around 45 per cent of the allocated oil was reserved for companies either based in Nigeria or owned by Nigerian companies, including NNPC subsidiary, Duke Oil, which doubled the size of its contract from last year to 60,000 bpd.
Global oil traders, Glencore, Vitol and Trafigura, firms that have traditionally had a strong presence in the country and last year won the biggest contracts, had their supplies halved to 30,000 bpd.
The release of the results of the tender followed the completion of the processing of documents produced by oil traders that submitted applications for the 2012/2013 crude oil lifting contracts.
The processing of the documents came after the May 11, 2012 deadline for submission of applications by interested bidders.
In the initial request for applications from interested bidders, NNPC had set the deadline for April 5 in the notices it released on March 21 and 22, with tough conditions for local companies. The conditions included at least 10 years’ experience in the industry, a minimum annual turnover of $600 million and a $5 million deposit.