UPDATE 2-Nigeria's NNPC issues 2016 crude oil contracts worth $13.5 billion

(Adds quotes, context) By Julia Payne and Libby George ABUJA/LONDON, Dec 17 (Reuters) - The Nigerian NationalPetroleum Corporation (NNPC) has issued its 2016 crude oil termcontracts to 21 companies, going directly to internationalrefineries, trading houses and local downstream firms, accordingto a list obtained by Reuters. The contracts cover 991,000 barrels per day (bpd) of oil,worth $13.5 billion at current crude oil prices, which isroughly half of Nigeria's crude oil production of around 2million bpd. The list includes refiners such as Spain's Cepsa, Italy'sSaras, India's IOC and ENOC of the United ArabEmirates, as well as trading houses Trafigura, Mercuria andVitol and international oil companies ENI, Total, Exxon and Shell. The remainder are Nigerian downstream and NNPC tradingcompanies. In a statement, NNPC said: "Apart from ensuringtransparency, the companies were carefully chosen based on theirtrack records and trading experience to ensure that Nigeriancrude cargoes are not left unsold." The list is pared down from the final 2015 contract list,which comprised 43 companies and did not include any globaltraders. Many of the mostly local companies included then werecriticised by international watchdog groups, such as the NaturalResource Governance Institute (NRGI), as "unqualifiedintermediaries" who added little value. President Muhammadu Buhari is on a campaign to root outcorruption in the NNPC and oil theft across the nation, which heassesses at about 250,000 bpd. During a televised launch of the contract process inOctober, when 278 companies submitting bids for crude oilcontracts, NNPC officials promised to slash the number ofwinners and conduct business differently. "Things have changed in Nigeria," said one oil industrysource close to the contract negotiations. "The process oftendering has been more transparent they want to work with morereputable companies." Oil traders said the inclusion of Exxon and Shell was alsounusual. "It is the first time for both," one trader of West Africanoil said of direct contracts between Exxon, Shell and NNPC. "Itseems to tie up with the drive to partner with end-users." NNPC's current managing director Emmanuel Ibe Kachikwu is aformer Exxon executive. The absence of China's Sinopec, and its trading arm Unipec,was also notable, as it is a large buyer of Nigerian oil and wason the 2015 contract list. Oil industry sources said there wasanother list of so-called "government" contracts with Nigeria'smajor partners yet to come, and many expected the company to beadded at a later date. On Thursday, Kachikwu told reporters that Nigeria isproducing 2.1 million bpd and aims to boost output to 2.4million next year. Contract holder Volume ('000 bpd) Refiners Emirates National Oil 60 Company Indian Oil Corporation 60 Cepsa 60 Saras SPA 60 International Trading Companies Trafigura 32 Mercuria 32 Vitol SA 32 IOC Trading Companies ENI Shipping and Trading 32 Totsa SA 32 Exxon Sale and Supply 32 Shell Western Supply and 32 Trading Nigerian Downstream Companies Emo Oil & Petroleum/China 45 ZhenHuaOil Northwest Petroleum and 45 Gas Forte Oil PLC 45 Oando PLC 60 Sahara Energy Resouce LTD 60 A.A. Rano Nigeria Limited 45 Eterna Oil 45 MRS Oil and Gas 60 NNPC Trading Companies Calson/Hyson 32 Duke Oil Incorporated 90 Total: 21 991 (Additional reporting by Ron Bousso and Alex Lawler in London,editing by William Hardy and David Evans)