NNPC invites bids for annual oil contracts

The  Nigerian National Petroleum Corporation (NNPC) has opened a tender to sell its oil through multi-billion dollar annual contracts starting in August, an official notice showed.

The  Nigerian National Petroleum Corporation (NNPC) invited refiners, trading houses and local Nigerian oil companies to submit bids by June 18.

NNPC did not specify the volume of oil to be awarded in the 2013 contracts but the notice said it planned to maintain “regional balance” in the distribution of oil to Africa, Europe, Asia and North and South America.

It said firms bidding must have an annual turnover of $500 million and be able to pay a $2.5 million deposit before buying the first oil cargo, down from $5 million last year.

Last year, Nigeria awarded nearly half of its $60 billion annual supply contracts to local companies and cut supplies to major commodity traders such as Glencore, Trafigura and Vitol.

The number of little-known Nigerian firms on the list raised doubts about government pledges to curb corruption in the trading of its oil, which was highlighted in a probe last year.

Nigeria is exceptional among oil producers as its largest term buyers are international trading houses, not oil refiners.

Nigeria produces an average of around 2.5 million bpd of crude oil and light gas liquids.