NNPC issues 2019-2020 crude-for-product tender

March 20th, 2019

The Nigerian National Petroleum Corporation (NNPC) has issued its 2019-2020 crude-for-product swap tender, the state-owned oil company said.

The Direct Sale Direct Purchase (DSDP) tender document did not specify the start date or the quantities involved, but said the arrangement would be for one year.

The tender is set to close on May 2 at noon (1100 GMT), NNPC said on its official Twitter account.

Crude-for-product swap contracts are the country’s main avenue to meet the bulk of its gasoline and gasoil needs.

Nigerian refineries have a capacity of about 445,000 barrels per day (bpd) but have underperformed for years, making Africa’s biggest oil producer almost wholly dependent on imports.

The crude-for-product swaps were extended until June, sources familiar with the matter said last year.

The existing contract holders, including trading houses Vitol, Trafigura, Mercuria and French oil major Total, started the swaps in mid-2017, accounting for just over 300,000 bpd of crude.

Nigeria produced 1.82 million bpd of crude in February, according to the Reuters OPEC survey.

Nigeria has been using swaps for about 10 years. NNPC launched the DSDP model in 2016 and under it, NNPC sells crude oil to refiners or trading houses, who in return, supply mainly gasoline but also other petroleum products such as diesel.

Late last year, NNPC said it had also agreed a crude-for-product deal with oil major BP.

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