The Nigerian National Petroleum Corporation (NNPC) yesterday opened the bids of the 278 firms for the sale and purchase of crude oil grades.
The companies include Televaris, Voyage Oil and Gas, Northbridge Energy, Linkstar Venture, United Refining Gashion, Stat Oil, Walter Smitth, SODE, Obat International Limited, Samgulf Petrolchemical Limited and Otahiyi Global Investment Company Limited.
NNPC Group Managing Director Dr. Ibe Kachikwu said the corporation would this week sell-off the over 20 cargoes of crude oil that have been in the market since the end of last year.
NNPC Group Executive Director (GED) Commercial and Investment Mr. Babatunde Adeniran, said the bid took cognisant of the fact that “at the end of last year, Nigeria has over 20 unsold cargoes in the market.”
The NNPC, he said, is now on the path of transparency, accountability and probity.
Group General Manager, Crude Oil Marketing Division, Malam Mele Kyari, said the Federal Government is strategising to balance the pricing of crude.
Kyari said the bidding would impact on the pricing of oil in the international market. He explained that the deal will now make the Nigerian crude predictable.
He said the current volume of oil that the Federal Government is entitled to from the production stream is 960,000 barrel per day (bpd) saying NNPC will limit its contracts to that bracket.
NNPC, he said, is attempting to ensure that the crude ends up in the procession of the ultimate buyers in order to avoid the present shock in pricing. He added that the corporation will ensure that Nigeria is not a major contributor to her own pricing instability.
According to him, credible buyers are absent from the market and it has culminated in a situation where individuals hoard cargoes.
Kyari lamented the situation “in which you have oversupply- fake oversupply that doesn’t exist and then the market reacts to that and then you have lower value.
“We have to make sure that we optimise the value of our crude. And for you to do that, you must have credible and reliable customers. And these customers also need you, mind you, they need to lock up their deals. They call them deals. “What that means is that they have buyers who take up from them and they need to be guaranteed.
They need some level of stability that will enable them plan with it.”
The NNPC, according to him, recorded 43 buyers in the past, which made it impossible for it to guarantee its monthly off-take to customers.
He said with the present bidding process, the government is pruning the number to 16 to stabilise the market and satisfy the customers.
He said the corporation will guard against selling to one category of buyer in order to forestall hoarding of crude.