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Wednesday, August 26, 2015
Deals for the offshore processing of crude and crude swaps have been cancelled. Nigeria’s president, Muhammadu Buhari approved the cancellation of the processing and crude swapping deals that take place between NNPC and oil traders.
The deals were designed to supply gasoline for crude as Nigeria’s antiquated refining sector operates well below capacity, leaving the country short on gasoline for domestic supply.
“Mr. President has approved the cancellation of the oil swap contracts. Mr. President has publicly expressed his displeasure over this oil swap deal,” spokesman Femi Adesina was quoted as saying in a Reuters report.
The oil swap deals were instituted by Buhari’s predecessor, Goodluck Jonathan.
A Reuters’ source at NNOC said the president cancelled contracts for roughly half of the 445,000 bpd of crude tagged for Nigeria’s refineries, the amount refiners use in the product swaps deals.
“The government may not have completely dumped the idea of swaps but the aim is to re-evaluate the whole contracts terminated to extract some favorable terms.” the source said.
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