Written by Punch
No fewer than 21 Nigerian firms have been shortlisted to lift Nigeria’s crude.
Reuters reports that the 21 firms are among 50 oil companies which scaled the screening by the Nigerian National Petroleum Corporation. The 50 firms are to be allocated about three-quarters of Nigeria’s daily production or around 1.6 million barrels per day via term contracts to 50 companies including 21 Nigerian firms, a document sent to winning firms showed.
But the names of the Nigerian firms were not listed in the Reuters report. The oil – which amounts to around 580 million barrels sold over the next 12 months – is worth nearly $60 billion based on current premiums of the country’s light, sweet crude to Brent futures.
The tender result, awaited since April, showed that around 45 per cent of the allocated oil was earmarked for companies either based in Nigeria or owned by Nigerian companies, including NNPC subsidiary Duke Oil, which doubled the size of its contract from last year to 60,000 bpd.
Industry sources expressed surprise at the number of small Nigerian firms on the list after government pledges to cut back on cronyism in the sector and the introduction of tough new entry requirements for this year’s tender. “The first thing you notice is that this isn’t a significantly shorter list, so the promise to simplify and streamline hasn’t been met,” said an Abuja-based oil industry source who confirmed the contents of the document.
“On the surface, many of the public’s concerns haven’t been dealt with.” Global oil traders Glencore, Vitol and Trafigura, firms that have traditionally had a strong presence in the west African country and last year won the biggest contracts, had their supplies halved to 30,000 bpd.
Trafigura and Glencore spokesmen declined to comment and a Vitol spokesman was not available for comment. The volumes for Swiss-based traders Gunvor and Mercuria stayed unchanged from 2011 at 30,000 bpd. NNPC hardened the qualification terms for the supply contracts when it first released the tender document in March as part of a drive to reform the sector.
These included at least 10 years’ experience in the industry, a minimum annual turnover of $600 million and a $5 million deposit, and were expected to help large international traders at the expense of local firms.
But the number of companies on the list grew from last year’s 45 and included many small African firms such as Tempo and Benny Peters, the document showed. “They (Nigeria) faced pressure and had to increase the list by around 20 companies. It was likely a struggle of back and forth and that also delayed the process,” said a trader with a company that won a contract.
The deadline for submissions was extended in April.