BREAKING: NNPC Is Finalising A 2.3 Trillion Naira Crude Swap Deal
Nigeria's state oil company, the Nigerian National Petroleum Corporation, NNPC is in the final stage of signing $6 billion, about 2.3 trillion Naira worth of deals to exchange more than 300,000 barrels per day (bpd) of crude oil for imported gasoline and diesel.
Sources with direct knowledge of the process told Reuters that the contracts, which came three months later than expected, include three more pairs of companies than last year.
This reflects Nigeria's increased reliance on NNPC for fuel imports.
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At least four of the 10 groups have signed contracts, set to begin from July 1, with the rest expected to do so by Friday, the sources said.
The NNPC, which is due to approve them by the end of the week, did not immediately respond to a request for comment.
The fuel quality in the final agreements was not immediately clear, but July 1 is the same deadline the country set for switching over to higher quality, lower-sulphur fuels that create less toxic fumes.
Sulphur levels were a major sticking point in the negotiations. The Ministry of Environment and the Standards Organization of Nigeria, the body responsible for setting requirements for imported goods, promised a switch to 150 parts per million, ppm gasoline and 50 ppm diesel.
Some sources said the new standards would be applied. Others reported that three different gasoline specifications - 1,500 ppm, 500 ppm and 150 ppm - would all be included in the contracts, giving NNPC options on which to import.
This year's deal includes international trading houses, not just oil refineries. The 2016 contracts included only companies with refineries in an effort to cut out middlemen.
The latest list contains several companies from 2016, including Varo Energy, Societe Ivorienne de Raffinage (SIR),
Total and Cepsa. Italy's ENI and India's Essar, which won 2016 contracts, are absent from this year's list, while Socar and Mercuria are new additions.
The contracts were initially planned to begin in April but last year's swap deals were extended at least twice in order to give NNPC more time to negotiate.