Nigeria Awards 39 Crude-Oil Term Contracts for 2017

By Obafemi Oredein

IBADAN, Nigeria--State-owned Nigerian National Petroleum Corp. (NNP.YY) awarded crude-oil term contracts to 39 companies for the year to end-December after receiving 224 bids.

The contracts are for 32,000 barrels a day except for Duke Oil Ltd., an oil trading arm of the NNPC, which received a 90,000 barrels-a-day contract, Mele Kyari, NNPC general manager at its crude-oil marketing division, said on Wednesday. Oil has been trading at around $52 a barrel.

Of the 39 companies, 11 are international trading firms, among them the trading arms of just two major oil producers--BP PLC and Total SA--in addition to companies such as Glencore PLC, Heritage Oil PLC, and Trafigura Beheer NV.

Three national oil companies are also on the list, namely China's Sinopec, India's Indian Oil Corp. and SacOil Holdings of South Africa.

Five oil refineries also secured contracts: Hindustan Refinery in India, Varo Energy, which owns and operates the Cressier refinery in Switzerland; Cameroon's Sonara refinery, India's Bharat Petroleum Corp. and Cepsa SAU of Spain.

NNPC awarded the remainder of the bids to Nigerian companies.

Nigeria, Africa's largest crude exporter, relies on oil exports for more than 90% of its foreign-exchange earnings and around 70% of government revenue, according to the International Monetary Fund.

The decline in the price of oil over the past two years has resulted in a huge loss of revenue for the country, depriving Nigeria of dollars needed for imports.

The West African nation has said it expects to produce 2.2 million barrels of crude a day this year, though attacks on energy facilities in its southern Niger Delta by armed militants could continue to limit output.

The 26 Nigerian crude oil grades on offer included Bonny Light, Forcados Blend, Bonga Qua Iboe Light, Yobo Blend, Erha and Escravos Light, Okwori, Okoro, Ima and Asaratoru, according to the NNPC.

Write to Obafemi Oredein at [e-mail]

(END) Dow Jones Newswires

January 04, 2017 09:42 ET (14:42 GMT)

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