Nigeria's NNPC awards new crude for product swap deals to four refiners

> New swaps will begin in February
> NNPC to create new framework for product imports
> Says no need to budget money for fuel subsidies in 2016
Nigerian state oil firm NNPC will award new crude for product swap agreements to Total, Varo Energy, Cepsa and ENI, the head of its crude marketing unit said on Friday.
The deals, which are expected to begin in February, differ from the former "offshore processing" agreements as they are directly with refineries who can use the crude oil to produce the oil products the country needs, NNPC's Mele Kyari told reporters.

NNPC said there was no need to budget money for fuel subsidies in 2016, as the country can reduce the cost of imported fuel below the current retail price.
NNPC cancelled the initial bidding process for crude swap agreements in November, choosing to go directly to refineries that could process the oil themselves in order to eliminate middlemen.
Varo Energy is a joint venture refining company between global oil trader Vitol and private equity firm Carlyle Group Cepsa, ENI and Total are all integrated oil companies with refineries in Europe.
NNPC reached interim swap agreements in September with its trading subsidiary Duke Oil and NNPC joint-venture companies Calson, which is with Vitol, and Napoil, which is with commodities trader Trafigura.
These could be extended as NNPC works to finalise the details of the new swaps.
Despite exporting some 2 million barrels per day (bpd) of crude oil, Nigeria is almost wholly reliant on imported gasoline, kerosene and other petroleum products.
Its four ageing oil refineries produced nothing in October, despite a goal from the company to produce 30 percent of its own gasoline in 2016.
In addition to the swap arrangement, it also relies on an import subsidy scheme that is itself expensive.
But Nigeria has struggled to make timely subsidy payments to traders due to the sharp drop in crude oil prices that have hammered the country's revenue. There were as a result periodic fuel shortages across the country.
Bello Rabiu, NNPC's head of corporate planning, said the company would create a new framework for fuel imports that could reduce the cost of delivering gasoline to stations by 10-15 naira per litre, which would bring gasoline below the price cap of 87 naira per litre and eliminate the need to pay subsidies.