Indian oil companies are requesting for an increase in the volume of Nigeria’s total term contract by more than 20% in 2017, as demand from the South Asian country rises, an official from the Nigerian National Petroleum Corporation (NNPC) said.

This is coming a few weeks before Nigeria finalizes its crude oil term lifting contracts for 2017, which is expected to be done by mid-December, S&P Global Platts news reports.

The crude oil term contracts comprise of the export of about 1.17 million b/d of Nigerian crude, out of the 2.2 million b/d that the country can supposedly produce. These crudes are sold by contract holders to consumers, refiners as well as other buyers.

However with Nigeria’s crude oil production down as a result the renewed militancy in the Niger Delta region, the term volumes for next year might be much lesser if the country’s output does not recover.

“Three Indian companies mentioned that they are looking for a combined total of 11 million mt [in 2017] from 9 million mt, this year. Now what they will get is a balance between term contracts and [spot] sales contracts,” Anibor O. Kragha, Group executive director at NNPC said.

Kragha added that talks are ongoing and once Nigeria regains its output, it will look towards India as the major buyer of its crude.

“Indian demand is very positive for us. A vibrant Indian economy is good for us. We just came out of a meeting with key Indian oil companies and they are pushing to get incremental allocations for the term contracts. We explained to them that there needs to be a balance,” he added.

Nigeria and India in the past month, have been worked on a memorandum of understanding to allow Indian companies participate in Nigeria's upstream and downstream oil and gas sectors.

India is a major buyer of Nigerian crude, which is light and sweet, rich in gasoline and diesel and low in sulfur, and meets the requirement of Indian refiners.

From 2015 to 2016, India imported close to 23.7 million metric tonnes of Nigerian crude, almost 12% of India's total oil imports, according to official Indian data.

The Asian country also imports around 2 million mt/year of LNG from Nigeria.

Indian refiners such as Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd are at present on crude oil term lifting contracts for 2016 with NNPC.

Anita Fatunji