The Nigerian National Petroleum Corporation (NNPC) has awarded its yearly crude oil lifting term contracts for 2014-2015, worth $40 billion, to mostly native Nigerian companies: Aiteo, Taleveras, Barbedos and many others. In doing so, it has downsized the contracts awarded to international oil traders, allocated to just 28 companies as opposed to around 50 awarded in 2012.
No contracts were given directly to foreign traders like Glencore, Trafigura and Vitol, with only Switzerland's Mercuria winning a contract – a break from the tradition for previous years. In order for global traders to access crude oil from Nigeria – Africa's top producer – they will need to partner with local companies.
The crude lifting contracts cover approximately 340 million barrels of oil, valued at close to $40 billion annually based on current Brent prices. The contracts run for a year and can be renewed. There were several Nigerian oil companies that featured on the annual list for the first time including Hyde Energy, Springfield and Barbedos Group, a conglomerate that also provides luxury aviation services.
The full list released by the NNPC is still preliminary and subject to revision, according to Reuters. A senior trading source, who formerly bought Nigerian crude oil, was quoted to have said that it was "incredible to have an OPEC member selling oil this way. There's one international trading house and barely any refiners on the list."
Nigeria's policy has been to increase the role played by local firms, both in operating oil blocks and trading, with the official aim of ending decades of control over the business by foreign majors. According to the report, Vitol may have indirectly won a share of the Nigerian exports to market via a Bermuda-based firm called Calson, in which it is a minority shareholder.
"It's not that the Swiss traders are being left out, it's that they're forcing them to share their pie with the indigenous companies," Reuters say, quoting an unnamed industry source in Nigeria. West African governments in places such as Ghana, Senegal, Burkina Faso, Sierra Leone and the Ivory Coast, which also used to refine Nigerian oil in domestic refineries, formerly had contracts that were not renewed, according to this provisional list.