Latest reports suggests that oil shippers have refused to lift Nigeria's crude which is very detrimental to the economy of the country.
Indian oil firm and one of Nigeria’s biggest oil buyers, Hindustan Petroleum Corporation (HPCL) on Monday declared that it would henceforth be cautious in buying Nigerian oil. The firm hinged its decision on the decision of shippers who are now shunning requests to lift Nigeria’s crude.
HPCL bought the two million barrels of Qua Iboe from Total, a trading arm of France’s Total (TOTF.PA), for October 7-8 lifting on a free on board (FOB) basis, meaning the buyer pays the cost of marine freight, insurance, unloading and other costs to destination
The Indian firm had chartered the Ridgebury Progress to lift the cargo, but the vessel owner refused to sign the “letter of comfort” sought by the Nigerian authorities. Head of HPCL refinery, B.K. Namdeo told Reuters on Monday that his company was still scouting for a vessel to lift a cargo for early October loading after the African nation sought a “letter of comfort” from shippers.
“We are finding it difficult to book a vessel to lift Nigerian crude…
"We will be cautious in future while deciding about crude of Nigerian origin,” he said.
Namdeo, however, said that his firm was unsure whether it would be able to lift a very large crude carrier of Qua Iboe crude on time.
“Nobody is coming forward to offer the vessel and whoever is willing to go to Nigeria is asking exorbitant rates,” he said.
Nigeria had cancelled a near two-month ban on 113 foreign-flagged vessels from loading crude or gas from Africa’s top producer in July, according to a letter from the Nigerian National Petroleum Corporation (NNPC).
But as a condition for the ban removal, it created the letter of comfort requirement in an effort to target oil theft.
All incoming vessels into Nigerian waters must get a “Letter of Comfort” from export terminal operators and buyers of Nigerian crude as “guarantee that nominated vessels are free and will not be utilised for any illegal activity whatsoever,” Mele Kyari, the NNPC’s Group General Manager, Crude Oil Marketing, said in the letter dated September 8.
At least 250,000 barrels of oil are stolen daily in Nigeria, according to President Muhammadu Buhari.
The tankers were banned on July 15, days before a meeting between Buhari and U.S. President Barack Obama in Washington.