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NNPC Reforms, Cancels Bids For Refining Crude Oil Abroad

by on November 4, 2015
Nigerian National Petroleum Corporation (NNPC) has cancelled all bids submitted by 44 firms for the refining of Nigeria’s crude oil abroad. The NNPC has also adopted a new regime of direct crude sale and purchase of petroleum products.
The NNPC formerly operated the Offshore Processing Arrangement (OPA), also known as crude swap, where crude Oil meant for domestic refining is sent to offshore refineries in exchange for petroleum products. The NNPC in a statement issued by its Group General Manager Public Affairs Division, Ohi Alegbe, stated that the new policy is “designed to enshrine transparency and eliminate the activities of middlemen in the crude oil exchange for product matrix”.
The Statement also read that “NNPC on Tuesday announced the replacement of the Offshore Processing Arrangement (OPA) option in preference for the more efficient Direct Sale-Direct Purchase (DSDP) alternative which allows for the direct sale of crude oil by NNPC, as well as direct purchase of petroleum products from credible international refineries”.
“NNPC came to this informed position after the evaluation exercise of pre-qualified bidders revealed that most of the 44 companies earlier shortlisted for the next stage of the tender process only had affiliations to refineries abroad, a situation which introduces toll on the value chain.”
“If allowed to subsist, the development would in turn constitute a significant value loss to the federation by way of accruals,  In this regard, only bonafide owners of refineries identified in the ongoing OPA Tender Evaluation process will be further engaged”.
“The identified refineries will be subjected to due diligence and analysis by NNPC-appointed consultants to confirm suitability in line with international best practice,” Alegbe said.
It will be recalled that The Nigeria Extractive Industries Transparency Initiative (NEITI) had raised an alarm that Nigeria lost $966 million in the last four years through swap deals.
The NNPC stated that the call for commercial bids issued to the 44 shortlisted bidders had been withdrawn with immediate effect.
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  • Emmy Duro
    November 4, 2015 at 8:26 am

    This is a welcome development. The elimination of middle-men will ensure constant, quality and cheaper service delivery to consumers and increase the money that accrues to the coffer of the FG. However, the FG should watch out for spoilers; the eliminated middlemen can lay ambush for the FG. All security checks must be put in place.


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