NNPC about to seal $6bn worth of crude for fuels swap deals
(Ecofin Agency) - The Nigerian National Petroleum Company (NNPC) is about to seal $6 billion worth deals to swap more than 300,000 barrels of crude oil per day for imported gasoline and diesel, Reuters reported citing sources with knowledge of the matter.
The contracts are to come into execution starting from July 1. So far, at least 10 groups have signed these, with more to follow by Friday, the sources said. The state-oil company is yet to approve the signed agreements.
Unlike last year, not only oil refineries will purchase the crude from NNPC, international trading houses such Socar and Mercuria are also interested.
The contracts were initially to begin in April but were delayed for the state-oil company to have more time to negotiate their terms. Indeed, under the agreements Nigeria will purchase only low-Sulphur fuels.
Though on paper, Nigeria has the capacity to process 445,000 barrels of crude per day, it imports most of the fuels it needs. This is due to the fact that the nation’s four refineries are functioning at low-capacity. In the past quarter, the country refined about 111,000 barrels per day thus 25% of its capacity.