The bid process was relayed live by all major broadcast networks as part of effort of the new management at the Nigerian National Petroleum Corporation, NNPC, to make the oil company more transparent.
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He said the current volume of oil that the Federal Government is entitled to from the production stream is 960,000 barrel per day (bpd) saying NNPC will limit its contracts to that bracket.
Ohi Alegbe, group general manager, group public affairs division, NNPC, said the corporation commenced the search through a technical bids process that witnessed the submission of 91 companies, consisting largely of indigenous vessel owners vying to secure contract for the provision of coastal and bunkering vessel services for the operations of the Pipelines and Products Marketing Company (PPMC), a subsidiary of NNPC. So, you can imagine the burden it takes off my shoulders.
“The idea is to select companies that are credible and capable, with track record and would not hawk the country’s crude oil”, Mr. Kyari explained.
A few of the companies that submitted bids include Forte Oil, MRS, Statoil, Eni Trading and Shipping Limited, Sacoil Energy Equity Resources, RainOil Limited, Repsol Trading S.A., Indian Oil Corporation Limited, Mercuria Energy Trading SA, Gunvor and BP Oil global.
The 26 grades of Nigerian crude oil on offer, representing the various blends of the commodity produced from various locations within the country’s operational area, include Bonny Light, Forcados, East Area (EA), Bonga, Qua Iboe Light, Yoho, Erha and Escravos Light.
A total of 278 companies submitted bids before the deadline last week.
Others are Pennington Light, Agbami, Brass Blend, Abo, Oyo, Okono Blend, Amenam Blend, Akpo Condensate and Usan. The rest are Atam Blend, Okwori, Okoro, Ima, Ukpokiti, Obe, Okwuibome, Ebok and Asaratoru.
An NNPC official told the auction that the current number of 43 contract holders would be reduced by at least a third so that companies could be sure they will get oil.
Commercial and Investment Mr. Babatunde Adeniran, said the bid took cognisant of the fact that “at the end of past year, Nigeria has over 20 unsold cargoes in the market”. “What this means is that we are going to eliminate all those transactions that are not necessary”, Mallam Kyari stated.
He said that the absence of credible buyers of the nation’s crude had resulted in a situation where people who bought crude cargoes knew little or nothing on how to utilise the crude. “We are thinking in the region of one-third of that number; maybe 15 or 16”.
“Once you are able to do that as a market strategy, then you need to sell to people in groups”. It has refiners, who are the ultimate off-takers; we have trading companies and then we have Nigerian downstream companies.
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“We are going to get as close as possible to the end users of our crude oil”.
