Nigeria - New Guidelines for Sale of Nigerian Crude Oil

New criteria for the sale of Nigerian crude oil was recently announced by the Federal Government. Under the new guidelines which came into effect at the end of July 1998 only companies which fall into the categories listed below will now be permitted to lift Nigerian crude oil.

• An upstream oil company which has acquired an oil prospecting license and has completed a prescribed amount of work on the concession.
• A company that has built an oil export refinery in Nigeria.
• Bona fide end-users who own refineries and retail outlets abroad.
• Well established and recognized large volume oil traders.

All such companies must have a minimum annual turnover of $100 million and must show a commitment to the development of the Nigerian economy by making a sizeable investment in Nigeria.

Companies in categories 3 and 4 must post a $1 million performance bond. This bond will be forfeited if after six months of a crude oil contract such company has not taken steps towards fulfilling its commitment to invest in the Nigerian economy.