Nigeria's NNPC finalising $6 bln worth of oil-for-product swaps

Thu May 18, 2017 12:11pm GMT
 

By Libby George and Julia Payne

LONDON (Reuters) - Nigeria's state oil company 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, sources with direct knowledge of the process told Reuters.

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.

A lack of local refining capacity means Nigeria is reliant on imported gasoline, 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, the sources said.

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

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.

Some 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.   Continued...

Oil workers walk through pipe installations on a tanker at Bonga off-shore oil field outside Lagos,  file.
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