NNPC seals $70m contract to supply crude oil to Indonesia

Chinazor Megbolu

The Nigerian National Petroleum Corporation (NNPC) through its subsidiary Duke Oil has sealed a deal to supply 30,000 barrels per day crude oil supply to Indonesia’s State oil Corporation, Pertamina, and Indian Oil Corporation in a bid to gain about $70 million.

The organisation said the development, will strengthen the country’s revenue outlook in the face of the volatility and uncertainty in the oil and gas industry.

The NNPC noted the initiative would signal Nigeria’s attempt to capture market share in Asia nations and also push the profit of the entity to about $70 million in the 2021 trading year.

This was disclosed in the latest edition of NNPC Quarterly Magazine, which showed that its oil trading entity, Duke Oil, has diversified its trading portfolio and adopted alternative trading strategies towards increasing its volumes and profitability.

The magazine also indicated that the subsidiary has concluded plans to take part in upstream third-party financing for direct access to Nigeria’s equity crude oil as well as securing 120,000MT of storage and blending facilities offshore.

It added that the subsidiary is also going into expanding into bitumen and base oil importation in the 2021 trading year.

It further pointed out that the move has already seen the gross revenue of the entity growing to N28 billion against a budgeted figure of N16 billion.

“Further from the impacts of Covid-19 and the thinking-out-of-the-box its management adopted, the company made remarkable inroads into the Asian market as a secured off-taker of Nigeria’s crude.

“From this, supply deals were hammered out with refiners in India amongst others.

“Based on this performance, Duke Oil has set its eyes on leveraging the inroads made in the Asian and Middle East market for sale of Nigeria’s crude oil grades.

“It is thus poised to secure term contracts for the supply of 30,000bpd of oil to Indonesia’s Pertamina, partake in Indian state-owned refineries crude oil purchase tender and develop counterparty business relationship with other Middle Eastern state-owned oil enterprises.

“The company also hope to undertake active participation in derivative markets, by registration and engagement with major trading houses while commencing derivatives trading to manage price risks.

“Ultimately, in 2021, NNPC Trading Management is geared towards activation of a robust business plan & automation and organizational structure to support the business expansion activities through,” the magazine said.