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Crude Oil Lifting Agreements


Dr. Bynoe explained that the government should market its share of crude oil through an agent. Guyana`s share of crude oil is sold free of charge at boarding (FOB) and in millions of barrels of lifting charges every 8 to 10 days. He stressed that the company not only offered drilling and offloading know-how, but also refineries. Therefore, “it would be wise for ExxonMobil to take this first elevator, which it will then process at its refineries, so that the quality of crude oil or the integrity of crude oil can continue to be preserved in the future.” According to the NNPC, Nigeria estimates oil reserves at 28.2 billion barrels of crude oil and 165 trillion feet of a thousand standard cubicles (including 75.4 trillion unsincompciated gas). In addition, the average extraction capacity is 2 million barrels of crude oil per day (bpd) and $7.6 billion per day of gas. This report will briefly focus on the business and contractual models used by the NNPC in crude oil trade agreements to formulate proposals to improve the trade framework for achieving fair business for Nigeria. This year (2017) out of a total of 224 business offers, 39 companies went to winners, with NNPC reporting that, when implementing pre-invitations and selecting offtakers after the controversy that followed the process,[4] the contract holder, either a refining company or a trading company, must raise a certain amount of crude oil abroad and return the derivatives to NNPC. Contracts set the expected yields of the products (i.e. the quantities of diesel, kerosene, gasoline, etc.) that the refinery will produce.

The refining company can also pay NNPC in cash for all products that Nigeria does not need. In 2008, as fuel shortages worsened, NNPC made an offer for a takeover bid in late 2009 and signed one with BP subsidiary Nigermed. The following year, PPMC signed another takeover bid with the Ivorian refining company Ivorian Refining Company (SIR). Oil for swaps comes from nNCCs 445,000 barrels per day “Domestic Crude Allocation” (DCA). The DCA provides the total volume of crude oil generally available for trade under the various contractual models that NNPC has used over the years.