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Nigerian National Petroleum Corporation, NNPC, has announced the replacement of the Offshore Processing Arrangement, OPA, option in preference for the more efficient Direct Sale-Direct Purchase, DSDP, in crude oil business.
This was disclosed in a statement yesterday signed by the
corporation’s group general manager, Group Public Affairs Division, Mr. Ohi Alegbe.
He said the new approach allowed for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.
The statement also explained that the effort was a major steer designed to enshrine transparency and eliminate the activities of middlemen in the crude oil exchange for product matrix.
The NNPC added that it came to this 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.
The corporation stated that 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 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 corporation said.
The NNPC noted that the call for commercial bids issued to the 44 shortlisted bidders made up of 34 international firms and 10 indigenous companies had been withdrawn.
The new wave of openness and transparency pervading the operations of the Nigerian National Petroleum Corporation (NNPC) received fresh impetus on recently with the public harvesting of 278 bids submitted by indigenous and foreign firms seeking to secure contract for the sale and purchase of the 26 Nigerian crude oil grades on offer.
The process which was covered live by all major Television networks in the country had in attendance representatives of the bidding companies with officials of the Bureau of Public Procurement, BPP, Department of Petroleum Resources, DPR, Nigerian Extractive Industry Transparency Initiative, NEITI, Nigerian Content Development and Monitoring Board, NDCMB as well as members of the civil society attending as independent assessors.
Speaking at the flag-off of the event, Group Managing Director of the NNPC, Dr. Ibe Kachikwu stated that the essence of the public opening of bid is to consolidate on the new promise of setting a new agenda for the Corporation anchored on the tenets of transparency, efficiency in line with President Mohammadu Buhari’s agenda for the oil and gas industry.
“The essence is to ensure that nobody needs to call me personally as Ibe Kachikwu for him to get crude allocation. So, you can imagine the burden it takes off my shoulders. It means a good amount of my time will now go into other relevant areas of operation where the country needs me most, ’’ Kachikwu said.
Throwing more light on the process, Mallam Mele Kyari, Group General Manager, Crude OilMARKETING Division of the NNPC, informed that with the new measure put in place, the incidence of brief case companies and hawking of Nigerian crude would become a thing of the past.
“The idea is to select companies that are credible, capable with track record and would not go to hawk our crude. We are going to get as close as possible to the end users of our crude. What this means is that we are going to eliminate all those transactions that are not necessary,’’ Mallam Kyari stated.
Mrs. Folashade Odunuga representative of the DPR commended NNPC for the transparent manner it conducted the bid process noting that as the regulator of the industry, the DPR is impressed with the new wave of transparency sweeping across the value chain of the Corporation.
The contract for the engagement of qualified and reputable companies for the sale and purchase of Nigerian Crude Oil grades is conducted in consonance and in pursuance of the provisions of the Public Procurement Act 2007 and the BPP guidelines.