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State-held Nigerian National Petroleum Corporation (NNPC) has awarded the 2017/2018 crude oil term contracts to 38 companies to lift 32,000 bpd each and an NNPC unit to load 90,000 bpd, NNPC said on Tuesday.
Nigeria had received 224 bids by companies seeking to purchase and lift Nigerian crude oil grades in 2017. Contracts were awarded to 18 Nigerian companies, 11 international traders, 5 foreign refineries, 3 national oil companies (NOCs) and two NNPC trading arms, the state-run oil company said.
According to Reuters estimates, the deals are worth more than US$72 million per day at Tuesday’s oil prices of around US$55.60.
The international traders awarded this year’s contracts include Trafigura, Glencore and the trading arms of BP and France’s Total SA.
Compared to last year’s contracts awarded to 27 companies, the trading arms of ExxonMobil, Shell and Eni are not on the 2017 list of winners. In the government-to-government contracts awarded for 2017, Indian Oil Company, China’s Sinopec, and South Africa’s SacOil won deals to buy Nigerian crude.
OPEC member Nigeria had been producing more than 2 million bpd of crude oil before militant attacks in the Niger Delta started crippling production and exports in 2015.
Nigeria was one of two OPEC producers exempt from the cartel’s pledged production cuts, together with Libya, on the grounds that its output has been seriously affected by militancy over the past year.
In mid-December, Nigeria’s Oil Minister Emmanuel Kachikwu said that the country was producing around 1.8 million bpd, up from an average 1.63 million bpd in the third quarter of the year. The rate of production is still 400,000 bpd below the peak of 2.2 million bpd before the militant attacks on oil infrastructure started in the Niger Delta.
One of Nigeria’s top priorities for 2017 was to achieve “lasting peace” in the oil-rich region and improve Nigeria’s oil refining infrastructure, Kachikwu said last month.
However, should Nigeria manage to lift significantly its production this year, it could derail fellow OPEC members’ attempts at curtailing the cartel’s production to 32.5 million bpd in a bid to reduce global oversupply and stabilize oil prices.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.