Duke Oil, the trading arm of the Nigerian National Petroleum Corporation (NNPC), is leaving London to establish itself in Dubai. This is according to some oil industry sources as quoted by Reuters.
The Duke Oil services, a subsidiary of NNPC, in a filing with the United Kingdom’s registrar of firms, Companies House, had also disclosed that it would ‘wind down’ its operations in the second quarter of the year (2019), and move to an unspecified country.
Although the primary arm of the group, Duke Oil Company Inc, is registered in Panama, sources who preferred anonymity claimed that the trading arm of NNPC is relocating from London to Dubai.
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Possible reasons: Duke Oil’s move to relocate from London may be influenced by the fact that the Asian market is fast becoming the main buyer of Nigeria’s crude. Also, moving to Dubai will enable efficiency in its operation, and at the same time, introduce accessibility to the country’s crude oil buyers in Asia.
More so, sources familiar with the matter made known that the move by Duke had tax advantages over keeping the office in London.
Controversy: There are speculations that the company (Duke Oil) shut down its London operations, as a result of the $9.6 billion judgement debt a United Kingdom court imposed on Nigeria in favour of an Irish firm, P&ID.
P&ID was awarded $6.6 billion in an arbitration decision over a failed project to build a gas processing plant in the Southern Nigerian city of Calabar. With the accumulated interest payments, the sum now tops $9 billion, which amounts to 20% of Nigeria’s foreign reserves.
Contrary to the speculations, the Group General Manager, Group Public Affairs Division of the NNPC, Ndu Ughamadu, said the shutdown had no connection with the P&ID issue.
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What you should know: The United States of America (U.S.A) is now competing with Nigeria for crude oil buyers in Europe and Asia.
Duke is one of the companies that swap Nigerian oil for fuels, primarily gasoline, in order to supply domestic consumers.
Duke, a fully owned subsidiary of the NNPC, had been based at the corporation’s office in London’s Hammersmith neighbourhood.