NNPC Awards 2017 Crude Term Contracts To 39 Companies

NNPC, Crude Term ContractsThe Nigerian National Petroleum Corporation (NNPC) has awarded 1.31 million barrels per day (BPD) of crude oil to 39 companies as part of its 2017 crude term contracts.

A statement by the Group Managing Director at the Public Affairs Division, Ndu Ughamadu, revealed the companies were selected for the term contracts after a transparent bid by 224 companies in December 2016.

The companies are 18 Nigerian owned companies, three foreign state owned companies, 11 international trading houses, five foreign refineries and trading arms of the NNPC group.

The statement said each of the contracts were for 32,000bpd apart from Duke Oil Limited, an oil trading arm of the NNPC which would be for 90,000bpd.

It also disclosed that the contract, which was announced by the Group General Manager of the Crude Oil Marketing Division of the corporation, Mr Mele Kyari, would run for one year, with effect from the January 1, 2017 for consecutive 12 circles of crude oil allocation.

The breakdown of the term contract winners are; Nigerian companies: Oando, Sahara Energy Resources Limited, MRS Oil and Gas, A.A. Rano Nigeria Limited, Bono, Masters Energy, Eterna Oil and Gas, Cavalva Energy, Hyde Energy, Britania-U, North West Petroleum, Optima Energy, AMG Petroenergy, Arkleen Oil and Gas Limited, Shoreline Limited, Emo Oil, Setana Oil and Prudent Energy.

International trading companies: Trafigura, Enoc, BP Trading, Total Trading, UCL Petro Energy, Mocoh Trading, Trevier Petroleum, Heritage Oil, Levene Energy, Glencore as well as Litasco Supply and Trading.

NNPC trading companies: Calson/Hyson and Duke Oil Incorporated.

Refiners: Hindustan Refinery, Varo Energy, Sonara Refinery, Bharat Petroleum and CEPSA.

Government to government: Indian Oil Corporation (India – IOC), Sinopec (China) and Sacoil (South Africa).

FG Expresses Commitment To Develop Nigeria’s Automobile Industry

President Goodluck Jonathan on Thursday said his administration is fully committed to rapidly developing Nigeria’s automobile industry through the diligent implementation of the country’s new National Automotive Policy.

Speaking at a meeting with the Chief Executive Officer of Nissan Motors, Mr. Carlos Ghosn and representatives of Nissan’s partners in Nigeria on the sidelines of the ongoing World Economic Forum in Davos, Switzerland, he added that a key objective of the new policy is to make new cars affordable to more Nigerians.

“The only way to reduce the preponderance of second hand cars on our roads is to produce good quality cars with affordable pricing locally,” the President said.

Welcoming the Nissan group’s investment in vehicle production, President Jonathan noted that all investors in local automobile production in the country will have a huge ready market for their products.

“The automobile industry in Nigeria has a huge potential for growth. The market is not just Nigeria, but the entire West African region,” the President observed.

Mr. Ghosn applauded the Federal Government’s new automotive policy, saying that it would encourage the inflow of investments and technical expertise to boost domestic vehicle production.

The Nissan CEO informed President Jonathan that Nissan Motors plans to roll-out the first made in Nigeria 4 X 4 Utility SUV in April this year using the old Volkswagen assembly plant owned by its partners.

Mr. Ghosn, who said that it is possible to produce two to three million cars in Nigeria annually with the consequent creation of thousands of direct and indirect jobs, told the President that Nissan intends to increase its investment in Nigeria and establish its own vehicle production plants in the country.

“We are interested in producing popular cars, totally adapted to the needs of Nigerians,” he said, adding that the company also plans to bring its global suppliers to make vehicle components in the country.

President Jonathan also met with President Jakaya Kikwete of Tanzania who assured him of his personal participation in the World Economic Forum on Africa scheduled to take place in Abuja in May 2014.

He later received the Mayor of Atlanta, Georgia in United States of America, Mr. Kasim Reed and Mr. Claude Dauphin, the President of Trafigura, a leading international commodities trading and logistics company.

Nigeria’s Rating At Risk If $1.3billion Loan is blocked, NNPC Warns

The Nigerian National Petroleum Corp (NNPC) has told lawmakers at the National Assembly that any move to block its deals to finance payment of $3.5 billion owed to fuel traders could expose the country’s economy to a sovereign credit downgrade or a banking crisis.

Major oil trading houses including Vitol, Glencore, Trafigura and Mercuria are owed millions of dollars by Nigeria for fuel deliveries, according to a government-commissioned report released last year.

The report showed that Glencore was owed $138 million, Vitol $198 million and Trafigura $53 million.

NNPC accumulated the debts to traders, some of which are three years old, due to non-payment of fuel subsidies by the government, the head of the company told parliament.

But NNPC has explained that the financial facility it is seeking is not a loan warning that “the exposure of domestic banks is about $1.5 billion, and a default of this magnitude of exposure could lead to another round of banking crisis,” NNPC said in a statement.

NNPC’s Group Managing Director; Andrew Yakubu stated that “the continued delay has dire consequences ranging from a major negative impact on the sovereign credit rating to costly litigation against the federal government in foreign courts,” it added.

The House of Representatives committee asked to see NNPC’s documents and said it would investigate.

According to Reuters News agency, the Ministry of Finance Ministry did not respond to calls for comment as well as Trafigura, Mercuria, Vitol and Glencore all declined comment.

Engineer Yakubu also explained to the lawmakers that NNPC was borrowing $1.56 billion through a special purpose vehicle to offset part of the fuel import debts and that it had allocated 15,000 barrels per day of oil output for a period of up to five years to pay back the money, the company said in a statement.

Engineer Yakubu said the company planned to settle the remaining debts through a second such forward sales arrangement as well as internal resources.

Lawmakers have questioned the fund-raising deal, saying NNPC is not allowed to take out loans under rules set out in the constitution.

Standard Chartered, which managed the banking deal, also reportedly declined official comment.

Credit rating

Credit rating agency Standard and Poor’s upgraded Nigeria in November, citing improved financial stability and optimism over banking and electricity reforms.

Its ratings from the three major agencies are still in junk territory, however, at BB- from S&P and Fitch and Ba3 from Moody’s.

Nigeria’s banking crisis ended with a sharp recovery in bank earnings last year after a 2009 credit crisis led to the near collapse of nine lenders.

President Goodluck Jonathan attempted to end fuel subsidies a year ago but backed down after it sparked widespread protests.

Decades of mismanagement and corruption have left NNPC heavily indebted, several audits have shown.

Trading companies have been battling for months to recoup the money, and some have stopped supplying Nigeria with fuel. Most have remained in the West African country, however, partly because of the huge opportunities it presents in the trading of crude oil.