Nigeria grants South Africa oil marketing rights

Aug 18, 1999 02:00 AM

The Nigerian government has granted South Africa the right for the first time to market 55,000 bpd of Nigerian crude oil.
The right to "lift", or act as a sales agent, granted to South Africa, comes as part of a larger re-allocation of marketing contracts by President Olusegun Obasanjo's new government, which was attempting to stamp out the corruption plaguing the oil industry, the Business Day newspaper reported.
Jackson Gaius-Obaseki, managing director of the Nigerian National Petroleum Corporation, began the shake-up, announcing the cancellation of 41 contracts to lift Nigerian crude. This was followed by the announcement of 16 new marketers.
Gaius-Obaseki announced that apart from South Africa, the National Oil Corporation of Kenya and Ghana National Oil Corporation, and 13 other companies would have a year's contract to lift a total of 865,000 bpd of Nigeria's crude. This amount is just less than half of Nigeria's daily production. The other half will be sold by the large oil companies operating in Nigeria, which typically have 50-50 joint venture partnerships with the Nigerian government agency.
South Africa tops the list of government-to-government deals. Kenya and Ghana were each given an allocation of 30,000 bpd. Other companies granted marketing rights are well-known names in the industry, including Glencore International of Switzerland, Total of France, Kyokuto Petroleum of Japan and North Atlantic Refinery of Canada.
However, a South African government spokesman expressed surprise at the announcement, saying that South Africa was not involved in tendering for the allocation. Industry representatives said the right to market the oil could constitute a political statement by the Nigerian government aimed at improving relations with South Africa.
Whether the contract would be lucrative depended very much on its terms, the paper quoted industry sources as saying. According to the Nigerian National Petroleum Corporation, new guidelines are to be introduced which require marketers to show a commitment to Nigerian development.
The lifters are required to invest heavily in the restive oil communities in Nigeria's troubled Niger delta.

Nigeria is the world's sixth largest producer of crude oil and Africa's largest. About 90 % of its foreign exchange is derived from crude oil.

Source: Xinhua via Newspage
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