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UPDATE 1-Nigerian state oil company ends delivery and offshore processing deals

Published 2015-08-26, 02:06 p/m
© Reuters. UPDATE 1-Nigerian state oil company ends delivery and offshore processing deals
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ABUJA, Aug 26 (Reuters) - Nigeria's state oil company has
cancelled its contract for the delivery of crude to the
country's refineries in Warri, Port Harcourt and Kaduna, it said
on Wednesday.
Oil sales account for about 70 percent of government revenue
in Nigeria, Africa's top crude producer, but the country imports
most of the fuel used by its 170 million inhabitants because of
its inefficient, ageing refineries.
"The corporation has cancelled the current contract due to
exorbitant cost and inappropriate process of engagement," a
Nigerian National Petroleum Corp (NNPC) statement said, adding
that the aim is to cut costs and improve efficiency.
Overhauling the energy sector in Africa's biggest economy
has been a priority of President Muhammadu Buhari, who was
inaugurated on May 29 after being elected largely on his pledge
to fight corruption.
NNPC also announced the termination of the offshore
processing agreements made in January with Duke Oil Company,
Aiteo Energy Resources and Sahara Energy Resources, saying that
it believed the agreements were skewed in favour of the
companies.
The statement added that a number of mostly local companies
have been approached to bid for new OPA deals, including Oando
OANDO.LG , Sahara Energy SAH.V , Calson, MRS, Duke Oil,
BP/Nigermed BP.L and Total Trading TOTF.PA .
NNPC's moves come a day after President Buhari approved
cancellation of crude oil swap deals for refined products
between NNPC and oil traders.

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