A total of 132 oil and gas marketing companies on Thursday submitted bids to lift Nigeria’s crude oil.
The firms include local, regional and international oil companies.
The bid is for the 2019/2020 contract for the lifting of Nigeria’s crude oil under the direct-sales direct purchase (DSDP) scheme.
Each of the eventually successful companies will be allocated some of the 445,000 barrels per day of Nigeria’s crude oil originally meant for domestic refining. The crude oil is being allocated because Nigeria is unable to locally refine such volume.
Only companies with the capacity to utilize the allocated crude oil to supply petroleum products to the country will be considered, the state oil firm, NNPC, has said.
The Group Managing Director of NNPC, Maikanti Baru, who performed the ceremonial bids opening, said the aim was to maximize the value of the country’s crude oil for the benefit of Nigerians.
Mr. Baru said the bid, which is the third since the DSDP scheme began in 2016, aligns with the present administration’s quest for transparency in the oil and gas industry.
The DSDP scheme was introduced in 2016 to replace the erstwhile 2015 crude oil Offshore Processing arrangement (OPA) contracts after they were found to be mired in corruption.
The NNPC GMD said between 2016 and March 2019, about 29.5 million metric tons (or 39 billion litres) of petroleum products have been supplied under the DSDP scheme.
This volume represents over 90 percent of the national requirement of about 55 million litres daily.
With its pricing framework lower than the Petroleum Products Pricing Agency (PPPRA) benchmark, the GMD said the DSDP has ensured a significant reduction in product demurrage cost by about 84 percent as well cost savings of about $2.2 billion over the years.
Under the 2019-2020 DSDP contract, Mr. Baru said the tender objectives seek to engage reputable and qualified companies for the direct sale of Nigerian crude oil as well as direct purchase of petroleum products.
Also, the selection of off-takers, he said, must align with tested transparent and accountable procedures in compliance with the Public Procurement and Nigerian Content Acts.
The GMD noted that the ultimate aim of the scheme was to ensure value optimization to the federation.
The General Manager, Crude Oil Marketing Department (COMD) of the NNPC, Melee Kyari, said the key objective of the DSDP was in line with the present administration’s aspiration to eliminate corruption in the country’s fuel supply system.
Mr. Kyari said eliminating corruption would not be possible without systems that respect the rule of law and guarantee a fair deal for players in the sector.
He said under the DSDP, transparency was crucial to ensure all key interest groups are carried along, while decisions are adequately validated.
The DSDP program, he said, is to ensure that the NNPC, as a supplier of last resort, achieves products supply stability in the country. The programme is also to ensure optimum value optimisation for Nigeria’s crude oil.
He said the bid exercise was to help select marketers and suppliers that have a good history, experience, international and local partners, and capacity to do the business.
“We are not only interested in empowering local companies, but we must make sure the business is done by the people who can do it. It is no longer business as usual, where people establish briefcase companies and expect to be patronized,” Mr. Kyari said.
“What we are looking for are public quoted companies who have paid their taxes; published their audited financial statements of accounts; high net worth operators with the financial capacity to raise letters of credit of at least $72 million for a cargo of petroleum products,” he added.
He warned the bidders to avoid throwing up unrealistic numbers considered to be either too low or too high and expect to be invited for negotiations.
“We will do everything to ensure the process complies with the provisions of the Public Procurement Act. But, the bid is not the lowest or highest bidder exercise in the strict sense of it. We have our benchmarks that have been validated by global standards,” Mr. Kyari said.
He emphasized the need for bidders to have partners that will not only meet local content requirements but also comply with global best practices.
See the full list of the 132 firms as obtained by PREMIUM TIMES below.
1. MARITIME SUPPORT SERVICES LIMITED
2 DELTA ENERGY ENGINEERING COMPANY
3 TRANSIT OIL NIGERIA LIMITED
4 PETROLEX OIL & GAS LIMITED/ALSAA PETROLEUM & SHIPPING FZC
5 GG ENERGY SUPPLY LIMITED
6 A&E PETRO NIGERIA LIMITED
7 MOB INTEGRATED SERVICES LIMITED
8 FALCON BAY ENERGY LIMITED
9 NORTH WEST PETROLEUM & GAS COMPANY/SETANA ENERGY LIMITED
10 GUNVOR LIMITED