Nigeria awards oil contracts to local firms

April 24, 2014

Nigeria has awarded most of its long-term oil contracts worth an estimated $40 billion a year to local companies, according to a confidential list seen by Reuters, meaning global traders need to partner with them to access crude from Africa's top producer, Reuters said on April 23.

Global commodity traders, refiners and Nigerian dealers jockey at an annual tender for access to the OPEC member's prized crude oil, which is easy to refine and produces more high-value fuels.

The contracts cover around 340 million barrels of oil, worth close to $40 billion annually based on current Brent prices, and run for a year, though they can be renewed. They were allocated to just 28 companies, versus around 50 in 2012, the last time they were awarded.

In a break with tradition, no contracts were given directly to global trading houses Glencore Xstrata, Vitol [VITOLV.UL], Trafigura [TRAFGF.UL] or Gunvor, with only Switzerland's Mercuria winning a contract, according to a list that four industry sources verified as accurate.

The trading companies that missed out on direct oil contracts declined to comment. The list, released by the Nigeria National Petroleum Corporation (NNPC), is preliminary and subject to revision. NNPC officials did not immediately respond to requests for comment.

Copyright: Reuters, 2014