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Major oil companies and the world's largest commodity traders have been among the winners of Nigeria's annual exchange bidding against crude oil withdrawals and the delivery of refined petroleum products.
The Nigerian National Petroleum Company (NNPC) – the OPEC member state oil company in Africa – announced on Sunday that it has signed crude oil exchange agreements for 15 consortiums and / or companies.
The units of BP and Total, as well as commodity traders Vitol, Gunvor, Trafigura and Mercuria, have won contracts, most of them in the form of consortia with local Nigerian companies.
Contracts under the so-called Direct Sales of Crude Oil and Petroleum Products Direct Purchase (PDAD) agreement will be spread over one year from October 1, 2019 until the end of the year. as of September 30, 2020.
"Under the DSDP agreement, the fifteen (15) consortia / companies mentioned below must, during the contract period, withdraw crude oil and, in return, deliver the corresponding petroleum products from their respective sources. a value equivalent to NNPC, subject to the terms of the agreement, "said NNPC. in the statement.
At the end of last year, the NNPC was seeking to sign more oil swap contracts because it was dependent on fuel imports although it is Africa's largest oil producer in the world. OPEC. Nigerian refineries need investment and modernization work and often do not work at full capacity. At present, Nigeria imports almost all the fuel that it consumes.
According to the NNPC, the country will need a refining capacity of 1.52 million bpd to meet its demand for fuel by 2025.
The reality is that Nigeria currently has operating refineries with a total processing capacity of 445,000 b / d and is often struggling to maintain them at full capacity due to underinvestment in maintenance. The country wants to triple the capacity of refining by 2025 in order to become more autonomous and become autonomous in fuel.
According to the NNPC, the 650,000-barrel-a-day refinery funded by Aliko Dangote, Africa's richest man, will provide the bulk of the increase in refining capacity. However, the refinery may not reach full capacity until mid-2020, a year and a half later than the originally planned start-up date.
By Tsvetana Paraskova for Oilprice.com
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