NNPC finalises $6 billion worth of oil-for-product swaps

NNPC Towers
NNPC Towers

The Nigerian National Petroleum Corporation, NNPC, is in the final stage of signing $6 billion worth of deals to exchange more than 300,000 barrels per day (bpd) of crude oil for imported gasoline and diesel, PREMIUM TIMES has learnt.

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

Nigeria’s lack of local refining capacity means that it relies on imported petrol, kerosene and other petroleum products, and the oil price crash and militant attacks on Nigeria’s oil industry have starved independents of dollars for fuel imports.

At least four of the 10 groups have signed contracts, set to begin from July 1, with the rest expected to do so by Friday, Reuters news agency reports.

The fuel quality in the final agreements was not immediately clear, but July 1 is the same deadline the country set for switching over to higher quality, lower-sulphur fuels that create less toxic fumes.

Sulphur levels were a major sticking point in the negotiations. The Ministry of Environment and the Standards Organization of Nigeria, the body responsible for setting requirements for imported goods, promised a switch to 150 ppm gasoline and 50 ppm diesel.

According to Reuters, sources said the new standards would be applied. Others reported that three different gasoline specifications – 1,500 ppm, 500 ppm and 150 ppm – would all be included in the contracts, giving NNPC options on which to import.

This year’s deal includes international trading houses, not just oil refineries. The 2016 contracts included only companies with refineries in an effort to cut out middlemen.

The latest list contains several companies from 2016, including Varo Energy, Societe Ivorienne de Raffinage (SIR), 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 NNPC more time to negotiate. NNPC had previously said this year’s contracts would exchange up to 800,000 bpd of crude oil, though at some 40 percent of peak exports that target was seen by markets as unlikely.

NNPC has been forced to ramp up its own fuel imports to around 80 percent of Nigeria’s consumption, according to figures from the company and oil traders.

Nigeria has substantially increased its refining output this year but the first quarter average was still only about 25 percent of its 445,000 bpd capacity. It has struggled to run them at higher rates due to years of neglect and consistent theft and sabotage of the pipelines feeding the refineries.

The NNPC, which is due to approve them by the end of the week, however, did not respond to a request for comment.


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  • Col. Wusasa Mariam

    A sinking country.

  • Tommy Soto

    Can’t wait to see the day when this scheme is obsolete and Nigerian refineries are up and running at +100%!

  • God Heal Nigeria Forsake Not N

    Gods servant GEJ thought out this oil swap programs that enabled Nigerians to enjoy uninterrupted petroleum product availability and at the same price of 86 naira per litre any where in nigeria from 2010 to 2015 ,until the malicious hate overcharged change agents instigated marketers to go on strike by april 2015 just to tanish that unblemished record of Jonathan.
    When buhari finally arrived on may 29, he blackmailed the oil swap programs and declared them corrupt, he threw Nigerians into an avoidable hardship because of his malicious, vindictive ,hate overwhelmed ,thoughtlessness .
    When the bubble bursted in the fuel supply chain, he destroyed Nigerian economy by cluelessley jacking the price of PMS from 86 to 145. That singular act of cluelessness ,spiralled inflation to 18% and Nigerian economy went flat.
    After destroying Nigerian economy for 2 years, buhari is shamelessly waking up from hate ,malice and vindictive induced slumber rather too late. Every thing about this government is all about policy Summersault.
    May God never allow anything that looks like a buhari to ever near Nigerian leadership again.

    • Tonnero

      Buhari has spent all of 2 years compared to your thieving Bufoons 5 and a half years. Real mumu. How come your saint could not fix the downstream sector with all the money he inherited from OBJ and Yar’Adua? You Biafrans, for I am sure that is what you are, have peanuts for brains. Your tribalism makes it impossible for you to think straight. You should go and die. It is your Jonathan that will never get there again. If Buhari is healthy in 2019, he will do a second term. Go hang if you don’t like that.

      • God Heal Nigeria Forsake Not N

        Already God have answered the agonizing prayers of Nigerians because of buhari evil yoke upon them ,and had given him a task to keep him busy on the bed in London.
        Go and dethrone The Almighty if you have the power, or you take a cue from your treacherous father awo and go for your choice of rat poison to end your frustration about Biafra.