NNPC to cut oil buyers to 16

A total of 278 local and international oil companies have submitted bids for the sale and purchase of the country’s crude oil. However, only 16 of them may be successful with their bids.

Currently, there are 43 contract holders licensed to lift the country’s crude.The bid opening to determine the successful bidders among the 278 firms was conducted at the headquarters of the Nigerian National Petroleum Corporation in Abuja on Tuesday.

Some of the companies are Statoil, Forte Oil Plc, Indian Oil Corporation Limited, Hindustan Petroleum Limited, Societe Africaine, Mercuria Energy Trading SA, Gunvor, Nigermed Petroleum SA, Eterna Plc, BP Oil International, Niger Delta Petroleum Resources Limited and Strategic Fuel Fund/South African Government.

The list also includes MRS, Eni Trading and Shipping Limited, Sacoil Energy equity Resources, Obat Oil, RainOil Limited, Repsol Trading SA, Energy Network IBG, Groundwells Energy International, Universal Import and Export International, Global Oil Incorporated and Waltersmith, among others.

The corporation also stated that contracts for the sale and purchase of Nigeria’s crude oil grades should be ready by November 20, 2015.

The Group Managing Director, NNPC, Dr. Ibe Kachikwu, said during the televised event that the new bidding process would help the firm become more efficient.

“The essence of this really is that you can go to this process and sign off your long-term contracts,” he added.

The Group General Manager, Crude Oil Marketing Division, NNPC, Mr. Mele Kyari, told journalists on the sidelines of the bid opening that the exercise would ensure that the country’s oil got to genuine buyers.

He said, “The process will ensure that crude oil is not sold to only one group. This optimises value for us. Our target is to make sure that this process becomes effective for our loadings in January. What it means is that you load two months ahead.

“Therefore, you must have this contract on ground in November; maximum by the 20th day of this month, you must have the contract on ground. Otherwise, you cannot use it for the January programme. So, our objective is to make sure that we close this out by the 20th of November.”

On how the development would impact the price of Nigeria’s crude, he expressed the hope that it would positively affect the country’s oil price in January.

“It has an effect. You will see tomorrow that the market will react. Remember this is an information world for as we are talking the whole world knows. So, the moment they realise that Nigeria’s crude supply will be stable and will be predictable in January, the sales in January will reflect that, you will see. And we are determined to make sure that this target is met,” Kyari said.

He explained that the quantity of crude that the government was entitled to through the NNPC for this purpose was 950,000 barrels per day, adding that the corporation’s contracts would be limited to this volume.

Kyari added, “The quantity is dependent on government’s entitlement from the production stream. And government’s entitlement is in the region of 950,000 barrels per day. So, our contracts will be limited to that bracket.

“We have a clear objective, which is to make sure that our crude oil ends with the ultimate end user. What that does is that it balances your pricing and you don’t have these shocks that you have in prices. It also ensures that Nigeria does not become a major contributor to the instability that we have in the crude oil market today.”

punch.com.ng