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224 firms bid to buy crude oil – NNPC

By The Citizen
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total of 224 companies yesterday bided to buy Nigerian crude through the 2016/2017 Nigerian National Petroleum Corporation (NNPC) Crude Term Contract.

Speaking with reporters at the bid opening in Abuja, the Group Managing Director, Dr. Maikanti Baru, said the number of companies that will emerge from the bidding will be a factor of actual production focus in February next year.

He said: 'The companies to emerge from the bid would be decided on actual production focus around February when the tenders are supposed to come in,' adding that the state-run oil firm selected about 37 companies from its bidding exercise last year.

Baru however pointed out that the volume that the Federal Government would be offering for sale from the transaction will be about 600,000 barrel per day (bpd) from the Joint Venture operations.

He added that 100,000 bpd would also be available from the transaction through royalties and taxes accruing from Production Sharing Contract (PSC).

Baru said: 'It is the volume that we get our JV operations that is about 600,000 barrels per day when you have full operations. We also have somewhere in the region of 100,000 barrel per day in terms of royalties and  tax that is accruing from the PSC operations. So these are the kinds of volumes we are expecting for next  year.'

He said NNPC was looking forward to refiners,  gigantic traders and companies that have invested tremendously in the downstream oil sector.

'We are targeting refiners and also big traders as well as companies that have made substantial investments in the oil and gas industry, particularly, downstream in Nigeria,' Baru said.

He said it was untrue, rumours that the government was finding it difficult to get buyers for the nation's crude, noting that Nigeria's crude is hot cake, adding that it is very valuable because of its light nature and also yields several by products.

Baru said contrary to the common opinion that the crude goes only to China, it goes to India and most European countries.

The GMD said: 'There is that speculation that we are suffering for markets. It is not quite true. Nigerians crude  has continued to earn premiums and they are hot cakes all over for refiners because of the light nature of the crude; it gives very high yields on the valuable products that are produced  from crude oil.

'Nigerian crude continues to maintain the market. In fact, contrary to a lot of speculations that a lot of Nigerian crudes go to China, no, they don't. Most of them are consumed in India and Europe, particularly this year and last year, most of Nigerian crudes end in European countries.'

According to him, the ceremony marked the opening of the 2016/2017 bid tender for Nigerian crude under the NNPC on behalf of government for the people of Nigeria.

He said the corporation is not signatory to the account of the proceeds but only plays the role of confirming the payment for the crude.

He added that the proceeds from sale of crude goes directly to the Federation Account in the Central Bank of Nigeria (CBN). - The Nation.