NNPC concludes $6bn oil swaps deal

The Nigerian National Petroleum Corporation (NNPC), is in the final stage of signing $6 billion worth of deals to exchange more than 300,000 barrels per day (bpd) of crude oil for imported gasoline and diesel.
The contracts, which come three months later than expected, include three more pairs of companies than last year, reflecting Nigeria’s increased reliance on NNPC for fuel imports.
Nigeria’s lack of local refining capacity means that it relies on imported petrol, kerosene and other petroleum products, and the oil price crash and militant attacks on Nigeria’s oil industry have starved independents of dollars for fuel imports.
At least four of the 10 groups have signed contracts, set to begin from July 1, with the rest expected to do so by Friday, Reuters news agency reports.
The fuel quality in the final agreements was not immediately clear, but July 1 is the same deadline the country set for switching over to higher quality, lower-sulphur fuels that create less toxic fumes. Nigeria’s lack of local refining capacity means that it relies on imported petrol, kerosene and other petroleum products, and the oil price crash and militant attacks on Nigeria’s oil industry have starved independents of dollars for fuel imports.
At least four of the 10 groups have signed contracts, set to begin from July 1, with the rest expected to do so by Friday, according to Reuters news agency.
The fuel quality in the final agreements was not immediately clear, but July 1 is the same deadline the country set for switching over to higher quality, lower-sulphur fuels that create less toxic fumes.
Sulphur levels were a major sticking point in the negotiations. The Ministry of Environment and the Standards Organization of Nigeria, the body responsible for setting requirements for imported goods, promised a switch to 150 ppm gasoline and 50 ppm diesel.
According to Reuters, sources said the new standards would be applied. Others reported that three different gasoline specifications – 1,500 ppm, 500 ppm and 150 ppm – would all be included in the contracts, giving NNPC options on which to import.
This year’s deal includes international trading houses, not just oil refineries. The 2016 contracts included only companies with refineries in an effort to cut out middlemen. NNPC has been forced to ramp up its own fuel imports to around 80 percent of Nigeria’s consumption, according to figures from the company and oil traders.