The Nigerian National Petroleum Corporation, NNPC, Tuesday, said it
has discontinued the Offshore Processing Arrangement, OPA, and has
replaced it with Direct Sale-Direct Purchase (DSDP) programme.
The NNPC, in a statement by its Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe, stated that replacement of the OPA with the more efficient DSDP was aimed at enshrining transparency and eliminating the activities of middlemen in the crude oil exchange for product matrix.
To this end, the NNPC disclosed that the call for commercial bids issued to the 44 shortlisted bidders, made up of 34 international firms and 10 indigenous companies have been withdrawn.
According to the NNPC, the Direct Sale-Direct Purchase alternative allows for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.
The NNPC further explained that it 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.
It added that if allowed to subsist, the development would in turn constitute a significant value loss to the Federation by way of accruals.
The NNPC said, “In this regard, only bona fide 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.”
The NNPC, had last month conducted the public opening of bids tendered by a total of 101 Nigerian and multi-national companies competing for the award of Offshore Processing Arrangements, OPA.
In the OPA, the NNPC undertakes to allocate a dedicated volume of crude oil for refining at offshore locations in exchange for petroleum products at pre-agreed yield pattern.
Speaking at ceremony, the Group Managing Director of the NNPC, Dr. Ibe Kachikwu, had noted that the Corporation had taken the pain to make the process leading up to the award open to public scrutiny to demonstrate before all members of the public that NNPC has nothing to hide.
“At the end of this exercise, we must be able to engage companies that are known to everybody and not shrouded in mysteries. We must have terms that are very transparent and comparative to terms anywhere else in the world where OPA are being done,” Kachikwu said.
He said that while the Corporation was working assiduously to ensure that the refineries were re-streamed to optimal levels, the NNPC would in the interim maximize the OPA’s in such a way as to secure the best deals possible for Nigeria.
“I hope that we should be able to build in futuristic growth patterns in the new deal. We should be able to come up with companies that have solid investments in Nigeria because this is not just a trading issue,” he said.
Also speaking at the ceremony, Mrs. Esther Nnamdi-Ogbue, Managing Director of the Products and Pipeline marketing Company, PPMC, stated that the essence of the exercise is to provide a level playing field for all industry players and to cut-off middle men who have been exploiting the system.
She disclosed that companies that stand a better chance of winning the contracts are those who have refineries, affiliations to refineries or access to refineries.
She stated that the NNPC, through this arrangement, plans to eliminate third party, adding that the companies would be expected to show agreements that have been signed with refineries.
The NNPC, in a statement by its Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe, stated that replacement of the OPA with the more efficient DSDP was aimed at enshrining transparency and eliminating the activities of middlemen in the crude oil exchange for product matrix.
To this end, the NNPC disclosed that the call for commercial bids issued to the 44 shortlisted bidders, made up of 34 international firms and 10 indigenous companies have been withdrawn.
According to the NNPC, the Direct Sale-Direct Purchase alternative allows for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.
The NNPC further explained that it 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.
It added that if allowed to subsist, the development would in turn constitute a significant value loss to the Federation by way of accruals.
The NNPC said, “In this regard, only bona fide 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.”
The NNPC, had last month conducted the public opening of bids tendered by a total of 101 Nigerian and multi-national companies competing for the award of Offshore Processing Arrangements, OPA.
In the OPA, the NNPC undertakes to allocate a dedicated volume of crude oil for refining at offshore locations in exchange for petroleum products at pre-agreed yield pattern.
Speaking at ceremony, the Group Managing Director of the NNPC, Dr. Ibe Kachikwu, had noted that the Corporation had taken the pain to make the process leading up to the award open to public scrutiny to demonstrate before all members of the public that NNPC has nothing to hide.
“At the end of this exercise, we must be able to engage companies that are known to everybody and not shrouded in mysteries. We must have terms that are very transparent and comparative to terms anywhere else in the world where OPA are being done,” Kachikwu said.
He said that while the Corporation was working assiduously to ensure that the refineries were re-streamed to optimal levels, the NNPC would in the interim maximize the OPA’s in such a way as to secure the best deals possible for Nigeria.
“I hope that we should be able to build in futuristic growth patterns in the new deal. We should be able to come up with companies that have solid investments in Nigeria because this is not just a trading issue,” he said.
Also speaking at the ceremony, Mrs. Esther Nnamdi-Ogbue, Managing Director of the Products and Pipeline marketing Company, PPMC, stated that the essence of the exercise is to provide a level playing field for all industry players and to cut-off middle men who have been exploiting the system.
She disclosed that companies that stand a better chance of winning the contracts are those who have refineries, affiliations to refineries or access to refineries.
She stated that the NNPC, through this arrangement, plans to eliminate third party, adding that the companies would be expected to show agreements that have been signed with refineries.
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