By Teddy Nwanunobi (with agency report)
No less than 16 consortia have been reported to be picked by the Nigerian National Petroleum Corporation (NNPC) for its new crude-for-fuel swap contracts for one year, starting in August.
The consortia, which qualified for the contracts, include: Abuja-based Eyrie Energy, MRS Oil, Oando, Sahara Energy, Kano-based AY Mai Kifi, Lagos-based Bono Energy, and Duke Oil (an NNPC subsidiary).
Others are: Total, major Swiss trading firms, Trafigura, Vitol and Mercuria; South African Litasco, Asian Energy Services, Prudent, BP, and Mocoh.
The above consortia, according to Reuters, are favoured for the contracts known as Direct Sale, Direct Purchase (DSDP).
The contracts are coveted, since they are used to supply nearly all of Nigeria’s petrol needs, as well as cover some of its diesel and jet fuel consumption.
The companies were invited on Friday to submit commercial bids, which were due on Tuesday, according to the report.
Those involved in the process said the list of winners was unlikely to change substantially, with the new DSDPs expected to replace those from 2019, which were extended until mid-2021.
Traditionally, if a foreign oil company wins, then it is typically paired with at least one local firm.
NNPC uses a DSDP mechanism to secure Nigeria’s fuel requirements in exchange for crude, a practice that has gone on for years as all the country’s refineries have remained comatose.
It would be recalled that the NNPC Group Managing Director (GMD), Mallam Mele Kyari, in an interview last year, said the DSDP had resulted in savings of more than $1 billion a year since its introduction.
Nigeria relies almost entirely on imports to meet oil product demand, because of significant and prolonged operational problems at its 445,000 barrels per day (bpd) of refining capacity.
The country consumes over 350,000 bpd of petrol, with the majority sourced from Europe.
