Familiar names, Oando, Sahara Energy and MRS Oil, are among 18 indigenous companies that have been selected by the Nigerian National Petroleum Corporation (NNPC) to lift crude oil on its behalf from 2017 to 2018, Business Day reports.
The number of indigenous participating firms is more than twice the eight indigenous firms that won similar bids last year, signifying the corporation’s commitment to encourage local firms in the Nigerian oil and gas industry.
Some of the other local companies listed include; AA Rano, Bono, Masters Energy, Eterna Oil and Gas, Cassiva Energy, Hyde Energy and Brittania U.
Others are NorthWest Petroleum, Optima Energy, AMG Petroenergy, Arkiren Oil and Gas Limited, Shoreline Limited, Entourage Oil, Setana Energy and Prudent Energy.
A statement signed by Ndu Ughamadu, group general manager, public affairs division of the NNPC, says the winners for this year’s drude oil lifting contracts also include; eleven international traders, five foreign refineries, three National Oil Companies (NOCs) and two NNPC trading arms.
The international beneficiaries are Trafigura, ENOC Trading, BP Trading, TOTAL Trading, UCL Petroenergy, Mocho, Tevier Petroleum, Heritage Oil, Levene Energy, Glencore and Latasco Supply and Trading.
The five foreign refineries are Hindustan Refinery, Varo Energy, Sonara Refinery, Bharat Petroleum and Cepsa, while the NOCs are India Oil Company, China (Sinopec) and South Africa (Saccoil). The NNPC trading arms are Duke Energy and the Carlson Hyso.
A further comparison between the present contract and last year’s indicates that crude allocations to Nigerian firms rose sharply from 405,000 bpd to 576,000bpd.
“We are not seeing many International Oil Companies winning bids, perhaps because they did not bid or win, but in any case, more is going to indigenous companies,”Chijioke Mama, energy analyst and founding CEO of EnergyDatar.
Overseas refiners were allocated 160,000 bpd in the present crude oil term lifting contract, as against 240,000 bpd they were allocated last year.
While 27 companies were awarded as off takers in 2016, the number increased to 39 in the 2017/2018 edition and Duke Oil alone got 90,000 bpd allocation, while all others got 32,000bpd.
BusinessDay analysis also shows that Nigeria prioritised India in the current exercise. Indian refiners such as Hindustan Refinery, Bharat Petroleum and Indian Oil Company featured on the list.
Indian refiners prefer Nigeria’s crudes like Qua Iboe, Bonny Light, Escravos, EA Blend, Erha, Usan and Agbami because most of their refineries, especially the older ones, have been designed to run on light sweet crudes.
In 2015 and 2016, India imported nearly 23.7 million metric tonnes of Nigrian crude, nearly 12% of its overall imports, according to official Indian data. Every month, about 25 per cent of Nigeria’s crude export goes to India.
Both the Nigerian Content Development and Monitoring Board (NCDMB) and the Petroleum Technology Association of Nigeria (PETAN) have been ardent advocates of involving more Nigeria companies in the spirit of local content development, as in the past local companies have been exempted from the scheme because of the complex criteria they are required to meet.
The Nigerian Content Development and Monitoring Board (NCDMB) estimated in 2013 that the Nigerian economy lost over $100 billon in five decades by allowing its crude oil to be carried exclusively by foreign owned tankers.
Bank – Anthony Okorafor, president of PETAN commended the group managing director of the NNPC for keeping his word to deepen local participation in contracts awarded by NNPC when the association met with him last year.
“The trend henceforth should be that Nigerian companies should be involved. The newly elected American President, Donald Trump is advocating that American companies should be encouraged to stay in America and produce goods. The Nigeria President should also be advocating for developing local companies by supporting them,” he said.
Some industry operators however have misgivings about the process. In the past, the criteria used was that for a company to qualify to lift crude oil, it must have an annual turnover of $100 million, a refinery, a processing agreement with a refinery, a net worth of $40 million and at least 200 personnel.