Bonny Light and Brent crude oil
Crude oil

In order to continue its exchange of crude oil for refined fuel, the Nigerian National Petroleum Corporation (NNPC) has contracted about 34 companies to carry out the deal.

According to some oil industry sources, the 34 firms are under a total of 15 groupings, which received the award letters issued by the country’s state oil firm.

(READ MORE: See the top 10 stockbroking firms on the NSE as of May 31st, 2019)

The 15 groupings said to have won the contract are: BP/Aym Shafa, Vitol/Varo, Trafigura/AA Rano, MRS; Oando/Cepsa, Bono/Akleen/Amazon/Eterna, Eyrie/Masters/Cassiva/Asean Group, Mercuria/Barbedos/Petrogas/Rainoil, UTM/Levene/Matrix/Petra Atlantic, TOTSA, Duke Oil, Sahara, Gunvor/Maikifi, Litasco /Brittania-U, and Mocoh/Mocoh Nigeria.

NNPC, Crude oil, crude swap
Mele Kyari, NNPC Group Managing Director.

What this means: With the new development, the firms which are now shouldered with the responsibility of carrying out the NNPC crude-for-oil exchange deal have grown by 120%. The numbers grew from 10 pairings to a total of 22 companies.

Oil companies, however, jostled to be on the list, because it gives them opportunity to have access to the country’s crude oil cargoes.

What you should know: Local and international oil traders and refineries get crude oil supplies in exchange for petrol and diesel from the NNPC under the deal.

In May 2017, the Corporation signed the deals with local and international traders to exchange about 330,000 barrels of crude oil per day (bpd) for imported petrol and diesel, as part of measures to sustain the supply of petroleum products across the country.

[READ ALSO: Crude oil theft in Nigeria might soon come to an end]

The deals, which were was said to have expired by the end of July 2018, were extended until the end of 2018. Due to unforeseen circumstances, the NNPC later extended the $6 billion oil swap deals by another six months to June 2019.

What is new: NNPC’s crude swap deals, which were previously referred to as offshore crude oil processing agreements (OPAs) and crude-for-products exchange arrangements, are now known as Direct Sale-Direct Purchase Agreements (DSDP).

Famuyiwa Damilare is a trained journalist. He holds a Higher National Diploma (HND) in Mass Communication at the prestigious Nigerian Institute of Journalism (NIJ). Damilare is an innovative and transformational leader with broad-based expertise in journalism and media practice at large. He has explored his proven ability in the areas of reporting, curating and generating contents, creatively establishing social media engagements, and mobile editing of videos. It is safe to say he’s a multimedia journalist.

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