Reuters logo
Nigeria seeks bidders for annual oil contracts
March 26, 2012 / 1:55 PM / in 6 years

Nigeria seeks bidders for annual oil contracts

* Bids to be submitted by April 5

* NNPC to distribute oil to several regions

* Traders see terms as unusually strict

By Emma Farge

GENEVA, March 26 (Reuters) - Africa’s top oil producer Nigeria has opened a tender process to sell its oil via multi-billion dollar annual term contracts beginning in June, an official notice showed.

State-owned Nigerian National Petroleum Corporation (NNPC) invited refiners, trading houses and local Nigerian oil companies to submit bids by April 5, according to the notice.

The notice did not specify the volume of oil to be awarded in the 2012 contracts. NNPC said it planned to maintain “regional balance” in the distribution of oil to Africa, Europe, Asia and North and South America.

OPEC member Nigeria is under pressure to fight oil industry corruption after strikes and protests in January, sparked by a hike in state-subsidised petrol prices.

The document said applicants must provide evidence of at least 10 years’ experience in the industry in what oil traders said might be a measure to limit cronyism.

It also said firms must have an annual turnover of $600 million and be able to pay a $5 million deposit before buying the first oil cargo.

“The requirements are strict. The idea is perhaps to reduce the number of companies involved,” said an oil trader involved in the tender process.

Last year many little known African companies were awarded contracts.

The trader added NNPC officials had signalled this year’s list of winners would be trimmed by a third. An NNPC spokesman could not immediately be reached for comment.

Nigeria is exceptional among oil producers as its largest term buyers are international trading houses, not oil refiners.

In 2011, Nigeria awarded around 1.5 million barrels per day (bpd) or more than half its oil production, w ith the three biggest contracts of 60,000 bpd given to oil trading giants Vitol, Trafigura and Glencore.

Nigeria produces an average of around 2.5 million bpd of crude oil and light gas liquids. (Editing by James Jukwey)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below