NNPC opens bid for 2021 Crude Oil Contracts

The Nigerian National Petroleum Corporation (NNPC) has on Monday announced the opening of invite to interested local and international companies to submit bids for crude oil contracts for the year 2021.

The request for bids to lift Nigerian crude and condensates was published yesterday and will be valid for one year. Interested companies are to submit their bid latest by 12:00 pm Nigerian time on December 22, 2020, according to the tender document released by NNPC on Monday morning.

The guidelines said the crude will continue to be sold on a Free on Board (FOB) basis, “subject to the general terms and conditions as would be advised to successful companies subsequently via Term Sheet (TS).”

Concerning financial requirements, NNPC tender document states that “audited Accounts for the past three (3) years (2017, 2018 & 2019) which must bear the stamp or seal of a credible Audit Firm.”

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“Demonstration of an average minimum turnover of US$ 500 million (or the Naira equivalent) and net worth of not less than US$ 250 million (or the Naira equivalent) for the Financial Years Ending: 2017, 2018 and 2019.”

The current Nigerian crude oil term contracts (2018-2020) involve the export of around 1 million barrels per day (mbpd) of crude and condensate, out of the 2.2 million b/d Nigeria has the capacity to produce.

The document specifically stated that refiners, companies forming part of a government-to-government arrangement, global crude oil traders and “indigenous Nigerian companies engaged in Nigerian oil and gas downstream activities” are eligible and can apply.

The current 2020 crude term contracts are held by more than 60 recipients, making it the largest list Nigeria has ever allocated. A sizeable chunk of these are domestic Nigerian companies that are new to the world of international oil trading.

Nigeria is almost entirely reliant on imported fuel because of years of neglect at its own refineries. It has leaned heavily on the swap arrangements to get fuel, particularly gasoline, as other would-be importers struggle to make money due to price caps.