The Nigerian National Petroleum Corporation (NNPC) has invited local and international companies to submit bids to lift Nigerian crude and condensates for 2021.
S & P Global reported that these crudes normally command a premium to Dated Brent, since they are largely light and sweet, making them rich in gasoline and middle distillates, and so are popular with global refiners.
However, the Nigerian crude oil has continued to depend on Asia and Europe as its two main destinations.
Bids for these contracts, which will be valid for one year, are to be submitted by 12:00 pm Nigerian time October 15, according to the tender document released by NNPC.
The document specifies that refiners, companies forming part of a government-to-government arrangement, global crude oil traders and “indigenous Nigerian companies engaged in Nigerian oil and gas downstream activities” can apply.
The current Nigerian crude oil term contracts (2018-2020) involve the export of around 1 million barrels per day (mbpd) of crude and condensate, out of the 2.2 million b/d Nigeria has the capacity to produce.
The guidelines said the crude will continue to be sold on a FOB basis, “subject to the execution of a sales and purchase agreement with selected buyers.”
Sources said the current contract, which had been expected to expire in mid-2020, will be rolled over until the end of the year. The current 2018-20 crude term contracts are held by more than 60 recipients, making it the largest list Nigeria has ever allocated.
A sizeable chunk of these are domestic Nigerian companies that are new to the world of international oil trading.