The state-run Nigerian National Petroleum Corporation (NNPC) has issued a tender inviting qualified and reputable companies for the sale, purchase and lifting of over 1 million barrels per day crude oil grades including condensate over 2021.
The current Nigerian crude oil term contracts (2018-20) involve the export of around 1 million b/d of crude and condensate, out of the 2.2 million b/d Nigeria has the capacity to produce.
Nigerian crude continues to depend on Asia and Europe as its two main destinations.
Bids for these contracts, which will be valid for a year, are to be submitted by 12:00 pm Nigerian time on October 15, according to the tender document released by NNPC.
The document specifies that refiners, companies forming part of a government-to-government arrangement, global crude oil traders and “indigenous Nigerian companies engaged in Nigerian oil and gas downstream activities” can apply.
The announcement stated that NNPC aims to sell Nigerian Crude Oil grades on a Free-On-Board (FOB) basis, subject to the execution of a Sales and Purchase Agreement with the qualified assigned buyers.
The firm has broken the tender down into four separate segments with the condition that a prospective bidder could only apply under one category.
Sources said that the current contract, which had been expected to expire in mid-2020, would be rolled over until the end of the year.
2018-20 term contracts
The current 2018-20 crude term contracts are held by more than 60 recipients, making it the largest list Nigeria has ever allocated.
A sizeable chunk of these are domestic Nigerian companies that are new to the world of international oil trading. As a result, a lot of these firms have transferred their allocation to bigger trading companies with more experience and connections with end-consumer markets.
Oil major, Total, along with international oil trading companies, Trafigura, Vitol and Glencore, Azerbaijan’s Socar, India’s International Oil Corporation and Russian Lukoil’s trading arm, Litasco, are some of the companies included in the 2018-20 NNPC term contract list, according to a copy of the list seen by S&P Global Platts.