Nigeria - Crude Trading Allocation
SacOil and EERNL signed a Memorandum of Understanding (“MOU”) to explore oil and gas (“O&G”) opportunities in the Republic of Nigeria. As part of this MOU the parties are evaluating various opportunities in Nigeria to participate in the sector, across the energy value chain.
SacOil’s role and interest in the business
SacOil is working closely with EER to manage the activities relating to the trading activities. The trading activities will provide an additional source of income for SacOil. The crude trading is to form a basis to expand the Group’s trading activities and build an effective trading segment for the Group.
SacOil and EERNL incorporated a Seychelles entity namely SacOil Energy Equity Resources Limited (“SEER”) with a minimal capital investment. SEER applied for and was awarded a twelve-month (12) term contract for the purchase of Nigerian crude oil grades by NNPC. The terms of crude trading allocation is standard for all third parties awarded a crude allocation by NNPC.
Although the contract is for a 12-month period, SEER has to apply monthly to NNPC for lifting of crude. The crude grades will vary and the availability of crude oil from NNPC for onward sale is dependent on aggregate crude production in Nigeria available for lifting by third parties. SEER is focused on securing monthly crude allocation, subject to availability.