Nigeria Extends Crude-For-Product Swap Contracts Until June 2019
In case you are wondering, which one is crude-for-swap contract?
Crude-for-swap means that since Nigeria produces crude oil but imports refined products, it supplies crude oil to the refiners in exchange for refined petroleum product of equivalent value.
Nigeria has been involved with this form of transaction since 2017.
It is now gathered that state-owned oil firm, Nigeria National Petroleum Corporation, NNNPC has extended the crude-for-product swap contracts, until June 2019.
NNPC’s swap contracts currently account for about 70% of Nigeria’s imports while 30% is done through the spot market, according to a source familiar with the matter, who spoke with Reuters.
The swap contracts, known as ‘Direct Sale Direct Purchase’, came into effect in July last year and were due to end after one year.
They were already extended once earlier this year to December.
NNPC paired up foreign trading firms with local partners to do the swaps.
NNPC is separately in advanced discussions with some of the swap contract holders to invest in rehabilitating its refineries.
A consortium was picked earlier this year but ironing out the financing of the projects has been slow, the source said.
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