The Nigerian Crude Oil Trade: What You need to Know

The Nigerian Crude Oil Trade: What You need to Know


1. NNPC telephone numbers are--------

2. All contracts are directly with NNPC and signed by COMD's General Manager

3. There are no assignment fees or reassigned contracts. NNPC sells its oil; it does not assign or reassign oil

4. All NNPC contracts are FOB delivery


5. All NNPC contracts are two parts: Part one is the terms of actual contract (6 pages) and part two is the standard NNPC General Terms & Conditions of Contract (24 pages)

6. All contracts are term contracts and established in barrels per day

7 There are no spot contracts

8. All contracts are non-specific as to what type of crude oil will be supplied.

9. There are no local brokers or allocation holders

10. There are no allocation, bulk allocations, bulk equities or presidential, Emiri or other allocation.


11. There is no such entity as NNPC-JV Operators or even NNPC-Shell JV Operators

12. At times NNPC sells its equity to its JV Partners as and when necessary

13. NNPC does not discount its crude oil


14. All Nigerian Crude Oil sold by NNPC's official selling prices (OSP) for each crude oil. The OSP is published by fax, every 25th of every month for the following month (23rd in December). Whilst the OSPs are based on platts Dated Brent any crude oil is only priced at the OSP for the date (month) of lifting. The OSPs are only sent to registered lifters, JV Partners and major trading exchanges. It is not a general publication in the public domain



15. Every month NNPC informs the lifter what type (grade) of crude oil available. The lifter may reject the lift if the type of crude is not acceptable to them- but it is just about unheard of to do so. NNPC attempts to provide the same type of crude continuously.


16: There are three OPS per grade of crude oil- prompt Basis or Advanced Valuation Basis or Deferred Valuation Basis

-PROMPT BASIS pricing period is 5 consecutive published quotations after the bill of lading date with the Bill of lading date being day zero

-ADVANCED VALUATION basis pricing period is 5 consecutive published quotations before the Bill of lading date with the bill of lading date being day six


-DEFFERED VALUATION basis pricing period is 5 consecutive published quotations with the sixth quotation day after the bill of lading date being day one

17. The Advanced and Deferred options are slightly more expensive than the prompt option. The Option Chosen has to be shown in the letter of credit or amendment to the letter of credit posted with NNPC bankers Central Bank of Nigeria, at least five days before the lifting date.

18. Lifters are informed of their crude type and quantity by fax from NNPC COMD. Lifters are informed of their lifting window and later the actual loading date (two day range) by faxes from NNPC


19. Lifters have to have and acceptable payment instrument in place 5 days before the lifting date- note that they have been checked for the financial capacity to be able to pay for the crude before any contract negotiation started.


20. Payment terms are normally 30days from bill of lading date


21. Current crude grades that have a published OSP.


22. NNPC places Adverts in foreign Business Magazines seeking buyers of crude oil