254 Firms Jostle To Buy Nigerian Crude Oil

254 Firms Jostle To Buy Nigerian Crude Oil

By Wires Editor | The Trent on January 9, 2018
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Ibrahim Idris, Maikanti Baru, NNPC
Dr. Maikanti Baru, Group Managing Director of the Nigerian National Petroleum Corporation, NNPC

For the third consecutive year, the gale of transparency and innovation in the marketing and management of Nigeria’s crude oil grades was sustained on Wednesday, January 9, 2018, as over 254 indigenous and foreign-owned entities submitted bids for the sale and purchase of the Federal Government equity crude under the 2018/2019 crude oil term contracts.

The opening of the bids was beamed live on a national television network.

It was also witnessed by officials of the Department of Petroleum Resources (DPR), Nigeria Extractive Industries Transparency Initiative (NEITI), Nigerian Content Development and Monitoring Board (NCDMB), as well as representatives of the civil society.

Eventual winners are expected to be off-takers licensed to trade on Nigeria’s equity crude for a 12-month period.

Nigeria’s crude oil allocation is done once every month to only successful companies.

Addressing the prospecting off-takers shortly before the commencement of the bidding exercise, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru said that the exercise was designed to promote greater participation of Nigerian enterprise while preserving world-class standards.

He assured that the best practices would be adopted in the selection of bidders, as he promised fairness and just treatment in the process.

“I wish to remind the general public that the Crude Oil Term Contract is not a Procurement Contract but a process of selecting partners for the sale and procurement of NNPC Equity crude oil volumes,’’ Baru clarified during the bid opening session.

Providing further insight into the 2018/2019 crude term bid exercise, Group General Manager, Crude Oil Marketing Division, Malam Mele Kyari informed that potential off-takers must be able to fulfill a long list of stringent requirements which include minimum annual turnover of $500 million for 2016 and a Net worth of $250 million for 2016.

He added that apart from the possession of 2015 and 2016 audited accounts, aspiring off-takers must demonstrate the ability to establish an irrevocable Letter of Credit subject to contract terms.

On the marketability of Nigeria’s crude in the international market, Kyari said Europe remained the major destination of Nigerian crude grades, accounting for 36.59 percent of the total sales, with Asia and the Far East receiving 28.43 percent.

He said 16.57 percent of Nigeria’s crude grades were exported to North America, 13.17 percent to Africa, 2.84 percent to South and Central America, while the rest of the world served as beneficiaries for the rest.

He informed that the sustained reforms in the marketing and disposal of Nigeria’s equity crude had eliminated the ugly incidents of ‘briefcase’ companies as witnessed in the past.

Representatives of the DPR, NEITI, NCDMB and the civil society expressed satisfaction with the level of transparency of the exercise.

(NAN)

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