No buyer of Nigerian crude oil has returned or rejected it despite the glut in global crude oil market, the Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari, stated on Monday.
Kyari explained that although some vessels carrying Nigerian crude were stranded recently, the commodity was not rejected, adding that the number of stranded vessels had reduced considerably.
The NNPC boss, who spoke during a live television programme monitored by our correspondent in Abuja, however, noted that buyers currently preferred cheap crude.
When asked where Nigerian crude oil was going to, considering price crash and product glut, Kyari replied, “There is no challenge with that. The buyers have choice now. Choice of quality and choice that is associated with distance. These two factors determine which crude oil consumers buy.
“Our major source of trade is Europe, followed by Asia, particularly India. And in times like this when crude oil prices go down, what buyers do is to buy the cheap crude available and take them into storage.”
He added, “So the way to gauge this is when your buyers don’t return the crude after six days of purchase. For by contract, after allocation of a cargo, the buyer is supposed to come back to you within six days and say I cannot take this. There is a legitimate right to do that.
“But none of our partners have come to tell us that they cannot take our crude and it is way pass the six days. This means that they have found value for this crude.”