The Nation-President Muhamadu Buhari has approved a
tendering process for the 2015/2016 Crude Oil Term Contract and the
evacuation of Nigeria’s crude oil equity from the various crude and
condensate production arrangements.
The Nigeria National Petroleum
Corporation (NNPC), which announced the presidential approval, said it
will begin with the advertisement of the Crude Oil Term contract in both
National and International print media for one month.
The new arrangement has been “carefully
structured to weed out briefcase companies and rent seekers,” a
statement by the Corporation last night said.
The NNPC confirmed the cancellation of
crude oil swap contracts as well as Offshore Processing Agreement
Contracts (OPA), which the corporation entered with traders under the
previous administration of President Goodluck Jonathan.
The corporation announced new measures
aimed at cost reduction and strengthening of operational efficiency
across its value chain.
It said after proper evaluation and in
line with the terms of contract for the delivery of crude oil to the
refineries in Warri, Port Harcourt and Kaduna, it cancelled the current
contract due to exorbitant cost and inappropriate process of engagement.
The Corporation noted that as a stop-gap
measure, NIDAS Marine Limited, a subsidiary of the NNPC has been
engaged to provide crude delivery service on negotiated industry
standard rate pending the establishment of substantive contract.
The statement signed by Group General
Manager, Group Public Affairs Division, Mr. Ohi Alegbe added: “We have
also commenced a rigorous and transparent process of securing capable
and competitive contractors for the delivery of crude oil by marine
vessels to Port Harcourt and Warri/Kaduna Refineries pending the
restoration of the Crude Pipeline infrastructure.”
The NNPC said it resorted to the
delivery of crude oil to the refineries by marine vessels following
incessant attacks on the Bonny-Port Harcourt refinery pipeline and the
Escravos crude pipelines by vandals and oil thieves resulting in the
complete unavailability of the pipelines in 2013.
The corporation also said the OPA
contracts it entered in January 2015 with three companies, namely- Duke
Oil Company Inc., Aiteo Energy Resources Limited and Sahara Energy
Resources (Nig) Ltd, has been cancelled because it was “skewed in favour
of the companies.”
Under the agreement NNPC allocates a
total of 210, 000 barrels of crude oil per day for refining at offshore
locations in exchange for petroleum products at pre-agreed yield
pattern.
“However after detailed appraisal of the
operation and its terms of agreement, the NNPC is convinced that the
current OPA is skewed in favour of the company’s such that the value of
product delivered is significantly lower than the equivalent crude oil
allocated for the programme,’’ the Corporation said.
The NNPC also observed that the
structure of the agreement does not guarantee unimpeded supply of
petroleum products as delivery terms were not optimal.
To address these lapses, the NNPC said
that it had commenced the process of establishing alternative OPA based
on optimum yield pattern with tender processing fees.
“After due appraisal of performance
trajectory, we have invited Messrs. Oando, Sahara Energy, Calson, MRS,
Duke Oil, BP/Nigermed and Total Trading to bid for the new Offshore
Processing Agreement while we have engaged AITEO, Sahara Energy and Duke
Oil to exit the current OPA,’’ the NNPC stated.
On the status of the Crude for product
exchange agreement (SWAP) reportedly entered into by the NNPC and some
oil traders, the corporation informed that the last SWAP arrangement
lapsed in December, 2014 and was never renewed.
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