UPDATE 1-Nigeria shores up fuel needs ahead of 2019 election with BP deal

By Julia Payne and Amanda Cooper LONDON, Nov 1 (Reuters) - Nigeria's state oil firm NNPC saidon Thursday that it had signed a crude-for-product deal with BP for the next six months to help meet the country'sgasoline needs over the holidays and ahead of its generalelection early next year. Despite being Africa's biggest oil producer and an OPECmember, Nigeria is almost wholly reliant on fuel imports as itsrefineries barely function after years of neglect andinfrastructure sabotage. Periodic fuel shortages are common with cars lining up atthe pump sometimes for days, especially during the Christmasperiod. Incumbent President Muhammadu Buhari, whose popularity isalready sagging, cannot afford to be seen as unable to meet theneeds of Nigeria's 190-million population. It was not immediately clear what volume would be allocatedto BP. NNPC already has 10 similar deals for a total of justover 300,000 barrels per day of crude out its close to 1.9million bpd of production as of October. NNPC initially announced on Twitter late on Wednesdaywithout providing details. BP declined to comment. In its statement, NNPC said the arrangement with BP wouldaccount for 20 percent of the west African country's totalgasoline needs. NNPC imports about 70 percent of Nigeria's fuel needs,mainly gasoline, via swap contracts known as Direct Sale DirectPurchase (DSDP). Foreign firms must pair up with a local company to deliverthe products. NNPC said that BP will be partnered with Nigerianfirm AYM Shafa. BP was not originally among the companies with whom NNPCsigned DSDPs. "BP's partnership with AYM Shafa...makes it a perfect fitfor our plans to ensure that there is adequate supply ofproducts throughout the coming Yuletide and even beyond theelection period," NNPC managing director Maikanti Baru said,adding that AYM Shafa has 150 retail outlets and depots. The existing contract holders that include trading housesVitol, Trafigura, Mercuria and French oil major Totalstarted in mid-2017. NNPC extended the existing DSDP contracts to June 2019 butseveral trading sources in the consortiums have requested newprice terms, sources with direct knowledge said. Higher oil prices this year have helped boost Nigeria'sforeign exchange reserves, but the weakness in the country'scurrency against the U.S. dollar has forced the central bank tospend billions to keep the naira stable and prevent an unwelcomespike in its import bill. Nigeria has been using swaps for about 10 years. NNPClaunched the DSDP model in 2016 and under it, NNPC sells crudeoil to refiners or trading houses, who in return, supply mainlygasoline but also other petroleum products such as diesel. Trader/Refin Local partner(s) Volume (minimum ery expected) Trafigura AA Rano 33,000 bpd Petrocam Rainoil/Falcon Crest 33,000 bpd Mocoh Heyden 33,000 bpd Cepsa Oando 33,000 bpd Sahara SIR 33,000 bpd Mercuria Matrix/Rahmaniya 33,000 bpd Socar Hyde 33,000 bpd Litasco MRS 33,000 bpd Vitol Varo 33,000 bpd Total Total 33,000 bpd 10 Groupings 330,000 bpd (Reporting by Julia Payne, additional reporting by Paul Carstenin Abuja; Writing by Amanda Cooper; Editing by Alexandra Hudson)