Cosgrace Lake: an oil vessel

India’s Hindustan Petroleum Corp (HPCL) will be cautious in buying Nigerian oil, its head of refineries said, as the company is still scouting for a vessel to lift a cargo for early October loading after the African nation sought a “letter of comfort” from shippers.

“We are finding it difficult to book a vessel to lift Nigerian crude … We will be cautious in future while deciding about crude of Nigerian origin,” B.K. Namdeo told Reuters.

He said his firm was unsure whether it would be able to lift a very large crude carrier of Qua Iboe crude on time.

“Nobody is coming forward to offer the vessel and whoever is willing to go to Nigeria is asking exorbitant rates.”

HPCL bought the 2 million barrels of Qua Iboe from Totsa, a trading arm of France’s Total, for Oct. 7-8 lifting on a free on board (FOB) basis, meaning the buyer pays the cost of marine freight, insurance, unloading and other costs to destination.

The Indian firm had chartered the Ridgebury Progress to lift the cargo, but the vessel owner refused to sign the “letter of comfort” sought by the Nigerian authorities.

Nigeria this month lifted a ban on certain oil tankers sailing into its territorial waters that was implemented in July. But as a condition for the ban removal, it created the letter of comfort requirement in an effort to target oil theft.