The Nigerian National Petroleum Corporation (NNPC) has awarded yearly crude oil lifting term contracts for 2014/2015 of about $40 billion to mostly Nigerian companies and by so doing, has downsized contracts awarded to international oil traders.
With this development, external traders will have to partner with the local companies to access crude oil from Nigeria, Africa’s top producer.
In a deviation from tradition, no contracts were awarded directly to foreign traders such as Glencore, Trafigura and Vitol – only Switzerland’s Mercuria won a contract.
The crude lifting contracts cover around 340 million barrels of oil, valued at close to $40 billion annually based on current Brent prices, and run for a year, though they can be renewed. They were allocated to just 28 companies, as against about 50 in 2012.
Several Nigerian oil companies that featured on the annual list for the first time include oil trading company Hyde Energy, oil and gas firm Springfield, and Barbedos Group, a conglomerate that also provides luxury aviation services.
Nigeria is one of a small group of major oil producers that allocates its crude directly to trading houses, offering middlemen an opportunity to make margins through reselling the crude.
Source: All Africa
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