FG
The Federal Government has issued invitation for bids from companies that meet the required criteria to lift its crude oil beginning from June 1, 2012 to May 31, 2013.
Also, Nigeria’s oil export is expected to rise to about 2.1 million barrels per day (bpd) in May, Reuters quoted oil trader as saying, citing provisional loading programmes, a level, which according to Reuters’ data is a nine-month high.
In a statement issued by the Nigerian National Petroleum Corporation (NNPC), which oversees activities of the oil and gas sector for the government, the companies that would apply must meet some standards required by the corporation.
The NNPC said such companies must be bona fide end-users that own refineries and retail outlets. The bidding companies also show details of their facilities, markets and volume of crude oil processed over the last three years, which must be attached to their applications.
NNPC also noted that if the bidding company is well established and globally recognised large volume trader, the company must provide evidence of its global network, its activities and volumes of crude handled in the last three years. But for indigenous Nigerian companies engaged in Nigerian oil and gas business, such companies must attach evidence of registration.
Other companies that are qualified to apply include those that have been involved in oil and gas business for not less than 10 years and such companies must show evidence of 10 years operation.
NNPC also said that all categories of applicants (companies) must have a minimum annual turnover of $600 million and net worth of not less than $300 million and must attach three years audited accounts. Besides, applicants would be required to pay $5 million as deposit for the first cargo to be lifted. Besides, payment for all cargoes shall be on the basis of confirmed irrevocable Letter of Credit (LC) from approved local and international banks, the corporation added.
The NNPC explained that short-listing of applicants for consideration of crude oil term contract allocation will be contingent upon successful independent due diligence reports.
On the reason for requiring a company that owns a refinery for bidding, an official of the corporation, who spoke to our correspondent in confidence said the government may decide to settle for barter at the end of the day. The source said that instead of outright sale of the crude oil, the government may exchange crude for refined products, which makes good business sense. The application from interested companies closes on April 5, NNPC said.
Shipping lists according to Reuters showed that Nigeria will load about 65 million barrels of oil on 73 tankers in May. The May exports are set to be the highest since August 2011, up from a planned level of 1.96 million bpd in April Reuters data said.
Nigeria is Africa’s top oil producer and exports have risen in the last two months due to rising production at Total’s newly streamed offshore field - Usan.
Exports from the field is rising fast and will load five cargoes or about 150,000 bpd in May compared with three cargoes in April.
Exports for the benchmark Nigerian export grade Qua Iboe are set to be steady in May at 12 cargoes. Bonny Light volumes are set to fall from eight tankers to five in May, Reuters said.
The export figures are exclusive of condensates.
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