Barely one month after the Minister of State for Petroleum, Dr. Ibe Kachikwu, negotiated a $15 billion crude-for-cash swap deal with India that would see the Indian government making an upfront payment to Nigeria for crude purchases, Indian refiners have indicated interest in increasing Nigerian crude imports from nine million metric tonnes in 2016 (MMTPA) to 11 million metric tonnes in 2017.

By the terms of the deal, which are yet to be agreed, the $15 billion would be repaid on the basis of firm term crude contracts over some years and in consideration for Indian public sector (PSU) companies collaborating in the refining sector.

Other methods of repayment include: exploration and production activities on a government-to-government basis by Indian PSU companies, and long-term contracts for the supply of crude to Indian PSU companies from Nigeria.

Successful bidders for Nigeria’s crude oil term lifting contracts for 2017 will emerge by the middle of this month.

Indian refiners such as Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) currently have crude oil lifting contracts for 2016 with the Nigerian National Petroleum Corporation (NNPC).

However, NNPC’s Group Executive Director, Refineries, Anibor Kragha, told S&P Global Platts in an interview on the sidelines of the Petrotech conference in New Delhi on Monday that the Indian state-run refiners were pushing for an increase in crude oil allocations from Nigeria.

“Three Indian companies said that they were looking for a combined total of 11 million metric tonnes in 2017 from nine million mt this year,” Kragha said.

About seven barrels of crude make one metric ton.

“Now what they will get is a balance between term contracts and (spot) sales contracts,” he added.

“We just came out of a meeting with key Indian oil companies and they are pushing to get incremental allocations for the term contracts. We explained to them that there needs to be a balance.

“Once Nigerian output recovers, it will increasingly look towards India as the major buyer of its crude. Indian demand is very positive for us. A vibrant Indian economy is good for us,” Kragha explained.

Under the crude term contracts, Nigeria exports around 1.17 million bpd of Nigerian crude, out of the 2.2 million bpd production that is sold by contract holders to end-users, refiners and other buyers.

The country’s production dropped in recent months to a 20-year low as a result of renewed militancy in the Niger Delta.

However, Kachikwu also told journalists on the sidelines of the New Delhi conference that the total production was around 1.9 million bpd, including 300,000 bpd of condensates.

Kragha said negotiations were ongoing and that if the deal is successful and Nigerian output recovers, the country would “increasingly look towards India” as the major buyer of its crude.

“Indian demand is very positive for us. A vibrant Indian economy is good for us,” he added.

In 2015-16, India imported nearly 23.7 million metric tonnes of crude (nearly 12 per cent of India’s overall imports) and over 2MMTPA of LNG from Nigeria.

Following the $15 billion negotiation, the two countries agreed to work on a Memorandum of Understanding (MoU) to facilitate investments by India in the Nigerian oil and gas sector; specifically in areas such as the term contracts, participation of Indian companies in the refining sector, oil and gas marketing, upstream ventures, the development of gas infrastructure, and in the training of oil and gas personnel in Nigeria.

The MoU is expected to be firmed up this month during PETROTECH-2016.

According to a source from an Indian refiner, “Nigerian crude is a must have for most of our refineries, especially the older ones, which have been designed to run light sweet crude.

“Despite all the militancy issues, we still buy Nigerian crude, as our refineries need it. We will continue to buy Nigerian crude, but we want them to supply us with more,” he said.

India, which is one of the world’s fastest growing economies, has seen its gasoline and gasoil demand climb sharply over the past few years.

This has encouraged Indian refineries to buy more Nigerian crude.

http://www.energywatchng.com/india-seeks-to-import-11m-metric-tonnes-of-nigerian-crude-in-2017/

Good news. We really need their cash. Ftc

Avenger,s you dey sleep, wake up, avenger,s.

This Kachikwu guy is a real nigger, no wonder my President brought him and luv him.

God bless Nigeria
God bless PMB

Increase the price, not amount of barrels
If they know the worth

According to a source from an Indian refiner, “Nigerian crude is a must have for most of our refineries, especially the older ones, which have been designed to run light sweet crude.

“Despite all the militancy issues, we still buy Nigerian crude, as our refineries need it. We will continue to buy Nigerian crude, but we want them to supply us with more,” he said.

cc lalasticlala

Another reason to tumble the Niger Delta to root out all economic sabos...

...and export Egusi soup, porridge and other local delicacy #sharp_guys

with dis and 29 billion loan,the end to economic crises is nigh

is ok

h

*yawns* pls u guys shd tell us smetyn else

K

It would only get worst

Nigerian crude from Benue? Where Dem go get am? I laugh

RisMas:
This is a very good developent, atleast, we have 3 working ministers in buhari's Govt. Fashola, Kachukwu and Adeosun . Others are sort of Ghost workers in my opinion

The most useless is that dalung of a guy. followed by shittu from my state.

v

Mrgabson:
Increase the price, not amount of barrels
If they know the worth

According to a source from an Indian refiner, “Nigerian crude is a must have for most of our refineries, especially the older ones, which have been designed to run light sweet crude.

“Despite all the militancy issues, we still buy Nigerian crude, as our refineries need it. We will continue to buy Nigerian crude, but we want them to supply us with more,” he said.

cc lalasticlala

You are a typical Nigerian

. we are gotten used to this type of news.

we will/to/soon. when will it be we "have"

stale news as usual. nothing good will come out from it trust me.

Wow ...2017 edition of NDA gonna be a hit

With Buhari as a President, I doubt if
200million metric tonnes of crude purchases from 20 countries will ever
add values to our Economy.
He will still borrow and lament for ever.

NDA let's intensify our efforts

lordm:
Good news. We really need their cash. Ftc

Bad news, India to Saudi and India to Nigeria, do the maths.

Is it crude from the niger delta or from the north

I hope na all of us go share the money

Govt wan use style borrow money and use our crude oil to refund it. This kind of deal is better than borrowing from imf and co.

Ok

RisMas:
This is a very good developent, atleast, we have 3 working ministers in buhari's Govt. Fashola, Kachukwu and Adeosun . Others are sort of Ghost workers in my opinion

trade and investment is also trying, i dont know if there is anyone in that portfolio this dispensation but the responsible ministry is doing well

limeta:
Avenger,s you dey sleep, wake up, avenger,s.

Nyamuri yaci ubanshi!

I hope the oyel is coming from Lagos? Please forget ND oyel because by 2017, production will hit an all time low of 0bpd.