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Dozens of companies land Nigerian crude oil contracts

Country is exempt from a managed production decline from OPEC because of militancy.

By Daniel J. Graeber
More than 30 companies land contracts for Nigerian crude oil, with transparency touted as a reason for the success. Photo by vanhurck/Shutterstock
 

Nigeria's state oil company said more than 30 companies, with nearly half of those foreign entities, have received one-year term contracts for crude oil.
The Nigerian National Petroleum Corp. awarded contracts to 39 companies covering about 1.3 million barrels of oil per day. Sixteen of the companies were either foreign refineries or international traders, with the rest of the terms going to Nigerian corporations.
Based on current oil prices, the contracts are valued at about $72 million. Each is for 32,000 barrels per day, apart from a subsidiary of the NNPC, Duke Oil, which gets 90,000 bpd.
NNPC Managing Director Maikanti Baru said in a statement that more than 220 companies put bids forward, which he said is a testament to transparency in the Nigerian energy sector.
"There is nothing that is hidden just as you have seen today," he said.
No U.S. refineries were listed among the recipients of the new terms. Swiss trader Trafigura, the trading arms of British supermajor BP and France's Total were among the international players.
Trafigura last year disclosed that it made about $14 billion in payments to governments or government-controlled companies in 2015, a decline of about 24 percent from the previous year. For the first time, the company said it was disclosing the payments it made in all of the countries where it does business, not just those party to the Extractive Industries Transparency Initiative.
Nigeria is exempt from an agreement crafted by the Organization of Petroleum Exporting Countries to cut production because of militant attacks on its oil sector. The nation's economy, meanwhile, is in recession, with third quarter growth shrinking by 2.3 percent year-on-year.
Nigeria reported to OPEC that its crude oil production in November was near 1.8 million bpd, a 28 percent increase from the previous month. The managed decline from OPEC is aimed at bringing the market back to a reasonable balance between supply and demand. An oversupplied market pushed crude oil prices below $30 per barrel in early 2016.
Dozens of companies land Nigerian crude oil contracts Reviewed by Chidinma C Amadi on 10:05 PM Rating: 5

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