BEVERLY HILLS, May 14, (THEWILL) – The Nigerian National Petroleum Corporation (NNPC) has picked 16 consortia for its new crude-for-fuel swap contracts for one year starting in August.
A report on Wednesday by Reuters listed the consortia to include major Swiss trading firms, Trafigura, Vitol and Mercuria, oil major Total as well as large Nigerian traders, Sahara Energy, Oando and MRS Oil.
Other companies which qualified for the contracts, include: AY Mai Kifi, based in Kano; Litasco, a South African firm; Bono Energy, Lagos; Duke Oil, an NNPC subsidiary; Eyrie Energy, based in Abuja; Asian Energy Services; Prudent; BP and Mocoh.
The contracts, known as Direct Sale, Direct Purchase (DSDP), are coveted since they are used to supply nearly all of Nigeria’s petrol needs as well as cover some of its diesel and jet fuel consumption.
The companies were invited on Friday to submit commercial bids, which were due on Tuesday, according to the report.
Those involved in the process said the list of winners was unlikely to change substantially, with the new DSDPs expected to replace those from 2019, which were extended until mid-2021.
Traditionally, if a foreign oil company wins, then it is typically paired with at least one local firm.
NNPC uses a DSDP mechanism to secure Nigeria’s fuel requirements in exchange for crude, a practice that has gone on for years as all the country’s refineries have remained comatose.
In an interview last year, NNPC Group Managing Director, Mallam Mele Kyari, said the DSDP had resulted in savings of more than $1 billion a year since its introduction.
Nigeria relies almost entirely on imports to meet oil product demand because of significant and prolonged operational problems at its 445,000 bpd of refining capacity.
The country consumes over 350,000 bpd of petrol with the majority sourced from Europe.
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