Nigeria’s oil exports under threat from theft crackdown


Nigeria’s latest effort to combat theft could imperil its oil income lifeline, compounding the damage the crude price fall has done to its finances, access to dollars and imports.
Oil traders and shipping brokers said a newly implemented “letter of comfort” requirement under which vessel owners must sign a guarantee that their ships will not be used for theft has made it more difficult and expensive to load Nigerian crude, putting some buyers off.
A copy of the letter draft seen by Reuters asked vessel owners to “guarantee to indemnify” the government and national oil company NNPC against any illicit use of their vessel, which led some owners to reject pending bookings. Traders say others are refusing future requests for now.
“Nobody is coming forward for offering the vessel and whoever is willing to go to Nigeria is asking exorbitant rates,” said K. Namdeo, head of refineries at India’s HPCL, adding they would “be cautious in future” about buying Nigerian crude.
Tanker owner Heidmar rejected an HPCL Nigerian fixture due to insurance concerns over the letter. Finding a replacement proved difficult. Provisional fixtures showed the MT Solana sailing to West Africa for HPCL, but the vessel turned away from Africa, according to tracking data, and is now en route to the Bahamas without oil. [ID: nL3N11Y3TP][ID: nL5N11S3OG]
Fixtures showed the refiner putting two Suezmax vessels on subjects for the journey, which typically adds to costs.
Some European buyers are also now treading carefully with Nigeria.
An oil trader for one Mediterranean refiner said they “will not touch a single drop of Nigeria crude until this matter on the letter of comfort is solved.”
BLANK CHEQUE
There is little disagreement that Nigeria needs to fight oil theft, which President Muhammadu Buhari has said siphons as much as 250,000 barrels per day (bpd) of crude of its nearly 2 million bpd of production.




Check the PM NEWS newspaper for the full story.


























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