The Nigerian National Petroleum Corporation has said it can sign crude-for-product deals with Shell and ExxonMobil.
The NNPC announced last Wednesday that it had signed such a deal and would provide more details later.
“Unfortunately, Shell and ExxonMobil left the downstream segment in Nigeria a couple of years ago but they are coming back for this specific plan, because it’s an opportunity for them to get crude and sell their products to the refineries,”
The Chief Operating Officer, NNPC, Bello Rabiu, was quoted saying on the sidelines of an African oil and gas conference in Cape Town, South Africa.
The NNPC imports about 70 percent of the nation’s fuel needs, mainly petrol, through swap contracts.
The corporation has bonds, known as direct sale direct purchase agreements, with 10 groupings, including trading houses Vitol, Trafigura, Mercuria and Total.
It extended the existing contracts to June 2019 but several trading sources in the groupings said they had demanded new price terms.
Rabiu said the NNPC expected that in 2019 savings of about $1bn seen in 2016 with its crude-for-product swaps, would likely end once the nation’s refineries were refurbished.
“If our refineries are back, which we want in the next 18 months, this thing will stop, he added.
According to the report, the NNPC is in the final stages of talks with groupings including top traders, energy majors and oil services companies to renovate its long-neglected oil refineries in an effort to decrease its dependence on imported fuel.
“It is on track and I believe if we don’t sign a final deal this month of November, we will surely sign in December,” Rabiu said.