Nigeria’s NNPC issues 2019-2020 crude-for-product tender

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LONDON, March 20 – Nigeria’s NNPC has issued its 2019-2020 crude-for-product swap tender, the state-owned oil company said.

The Direct Sale Direct Purchase (DSDP) tender document did not specify the start date or the quantities involved, but said the arrangement would be for one year.

The tender is set to close on May 2 at noon (1100 GMT), NNPC said on its official Twitter account.

Crude-for-product swap contracts are the country’s main avenue to meet the bulk of its gasoline and gasoil needs.

Nigerian refineries have a capacity of about 445,000 barrels per day (bpd) but have underperformed for years, making Africa’s biggest oil producer almost wholly dependent on imports.

The crude-for-product swaps were extended until June, sources familiar with the matter said last year.

The existing contract holders, including trading houses Vitol, Trafigura, Mercuria and French oil major Total, started the swaps in mid-2017, accounting for just over 300,000 bpd of crude.

Nigeria produced 1.82 million bpd of crude in February, according to the Reuters OPEC survey.

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Nigeria has been using swaps for about 10 years. NNPC launched the DSDP model in 2016 and under it, NNPC sells crude oil to refiners or trading houses, who in return, supply mainly gasoline but also other petroleum products such as diesel.

Late last year, NNPC said it had also agreed a crude-for-product deal with oil major BP.

Reporting by Noah Browning; Editing by Dale Hudson and Louise Heavens

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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