NNPC Awards Two-Year Term Crude Oil Contracts

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Crude export contracts have been issued to 30 companies by the Nigeria National Petroleum Corporation, NNPC, the contract is expected to last two years instead of the usual one year.

A partial preliminary list showed 30 companies including the world’s largest energy traders, Vitol, Trafigura and Glencore. The final list could contain between 50 and 60 companies, sources added, even as NNPC did not immediately respond to a request for comment.

In 2017, NNPC published results in January awarding contracts to 39 companies, including Total, Spain’s Cepsa, the trading arm of Azerbaijan’s Socar and Lukoil’s trading subsidiary, Litasco.

Switzerland-based Mocoh and Petraco, Lebanon’s BB Energy, and Nigerian firms Sahara Group, Eterna and Oando were also among those on the list.

Meanwhile, oil prices steadied below 3-1/2 year highs on Monday as resistance emerged in Europe and Asia to US sanctions against major crude exporter Iran, while rising US drilling pointed to higher North American production.

Brent crude was up 20 cents at $77.32 a barrel by 1315 GMT and US light crude rose 10 cents to $70.80. Both oil futures contracts hit their highest since November 2014 last week at $78 and $71.89 a barrel, respectively as markets anticipated a sharp fall in Iranian crude supply once US sanctions bite later this year.

It is unclear how hard US sanctions will hit Iran’s oil industry.

A lot will depend on how other major oil consumers respond to Washington’s action against Tehran, which will take effect in November.

China, France, Russia, Britain, Germany and Iran all remain in the nuclear accord that placed controls on Iran’s nuclear programme and led to a relaxation of economic sanctions against Iran and companies doing business there.

The surge in oil prices comes at a time of tight supply amid record Asian demand and voluntary output restraint by the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, including Russia.

 

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