Two-hundred and twenty four firms have bidded for the rights to market Nigeria’s crude oil estimated at 700, 000 barrels per day for the next one year.
The number of bidding companies which was down from the high of 278 firms last year, will battle for about 30 slots, going by the number approved last year.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru who opened the first bids in Abuja on Thursday said other government agencies were invited to monitor the process to confirm the transparency of the system.
Maikanti explained that contrary to insinuation that the country was finding it difficult to market its crude oil and was therefore relying on buyers in China, most of its crude in the past year was sold to European and Indian refiners and marketers.
He said crude sales to US markets have also picked up in the past one year.
He said the volume of crude on offer is made up of the Federation oil of 600,000bpd and another 100,000bpd of royalty oil and tax oil.
According to him, “the bid opening marks the beginning of the 2016/17 term contract tender for Nigerian crudes under the NNPC on behalf of the government and people of Nigeria.
“When we sell this crude the money goes straight to the central bank’s account on behalf of the Federation and the nation. NNPC does not operate any of those accounts. The best input by NNPC is confirmation that the money has been paid but we have no signature rights on these accounts contrary to the perception of several people that NNPC is withholding some monies for and on behalf of the Nigeria people.
“So, all the crudes that we sell go to the Nigerian people”, he added.
Speaking on the specific figures on offer, he explained that the bids were for the rights to the volume from NNPC JVs (Joint Venture) which is about 600,000bpd and “also somewhere in the region of 100,000bpd in terms of royalty and various tax oil that is received from PSC (Production Sharing Contract) operations. These are the kind of volume we are expecting for next year”.
He said the number of companies to be chosen will be depended on actual production focus around February next year when the tenders are supposed to come in.
Explaining the possible reasons for the drop in the number companies that bidded this year, Maikanti said NNPC is targeting “refiners and also big traders as well as companies that have made substantial investments in the oil and gas industry, particularly, downstream in Nigeria”.
He noted that it is not true that Nigeria is struggling for markets to sell its crude, stressing that “Nigerian crudes have continued to earn premium and it is a hot cake for refiners because of the light nature of the crude which gives very high yields on the valuable products.
“Contrary to speculations that a lot of Nigeria crudes go to China, they don’t. Most of them are consumed in India and Europe particularly this year and last year most of Nigerian crudes ended in European refineries”.
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