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By Wendell Roelf
CAPE TOWN, Nov 5 (Reuters) - Nigeria's state oil firm NNPCcould sign crude-for-product deals with Shell andExxonMobil, similar to one signed with BP lastweek, a senior NNPC official said on Monday.
Nigerian National Petroleum Corporation (NNPC) announcedlast Wednesday that it had signed such a deal with BP and wouldprovide more details later.
"Unfortunately, Shell and ExxonMobil exited the downstreamsector in Nigeria a couple of years ago but they are coming backfor this particular arrangement, because it’s an opportunity forthem to get crude and sell their products to the refineries,"NNPC’s chief operating officer for upstream, Bello Rabiu, toldReuters on the sidelines of an African oil and gas conference inCape Town.
NNPC imports about 70 percent of Nigeria's fuel needs,mainly gasoline, via swap contracts. NNPC has contracts, knownas direct sale direct purchase agreements, with 10 consortiumsthat include trading houses Vitol, Trafigura, Mercuria and Total.
It extended the existing contracts to June 2019 but severaltrading sources in the consortiums said they had requested newprice terms.
Rabiu said NNPC hoped in 2019 to emulate savings of around$1 billion seen in 2016 with its crude-for-product swaps, whichhe said would likely end once Africa's top crude producerrevamps its refineries.
"If our refineries are back, which we want in the next 18months, this thing will stop. So, all these things are juststop-gap measures, but the key issue is that we wanted to importat the least cost before our refineries come back onstream," hesaid.
NNPC is in the final stages of talks with consortiumsincluding top traders, energy majors and oil services companiesto revamp its long-neglected oil refineries in an effort toreduce its reliance on imported fuel.
"It is on track and I believe if we don't sign a final deal(on the project to upgrade refineries) this month of November wewill surely sign in December," Rabiu said.(Reporting by Wendell Roelf; Editing by Susan Fenton)
