Towards diversifying its sources of supplies, Indian Oil Corp (IOC) on Thursday revealed that it is doubling the crude oil it purchases from Nigeria on a term contract.

“Nigeria has now agreed to increase the term contract from 1.7 million tons per annum to 3 million tons in 2016,” Oil Minister Dharmendra Pradhan (photo) told Financial Express.

The term contract grants not just guaranteed supplies, but at also a lesser price as the rate is based on official selling price of exporting country.

IOC purchases 8 million tons a year of crude oil from Nigeria. It is the only Asian company to have been offered a term contract by the new government in Nigeria, as it India’s third major oil supplier after Saudi Arabia and Iraq, selling 11.59 million tons in H1 of current fiscal.

In 2015, Nigeria had sold term crude oil to 43 companies. This year, it signed term contracts for 991,000 bo/d and IOC was amongst the companies chosen for the contract alongside Spain’s Cepsa, Italy’s Saras, ENOC of UAE, Trafigura, Mercuria, Vitol, ENI, Total, Exxon and Shell.

According to IOC’s Chairman B Ashok, Nigeria selected the companies based on their track records and trading experience so as to certify that its crude cargoes are sold.

Anita Fatunji