NNPC Cancels Swap Agreements, Will Now Deal Directly With Refiners
Citing reasons which include the determination to “enshrine transparency and eliminate the activities of middlemen in the crude oil exchange for product matrix,” the Corporation in a statement yesterday announced the replacement of the OPA option in preference for what it termed a “more efficient Direct Sale-Direct Purchase (DSDP) alternative.”
This alternative according to the statement signed by its spokesman, Ohi Alegbe, allows for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.
The NNPC 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.
The Corporation stated further 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to the 44 shortlisted bidders made up of 34 international firms and 10 indigenous companies have been subsequently withdrawn.”
The Corporation had on October 15, 2015 opened the 101 bids for OPA where it set a $1 billion baseline capacity, including that a company must own a refinery, affiliated to a refinery or access to a refinery as conditions for consideration.
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