254 local, foreign firms bid to trade Nigeria’s crude oil in 2018

The Nigerian National Petroleum Corporation, NNPC, yesterday, started the process for the selection of off-takers for its various crude oil grades in 2018, with 254 companies indicating willingness to participate in the process. Speaking at the 2018/2019 crude oil term contract bid opening ceremony in Abuja, Group Managing Director of the NNPC, Mr. Maikanti   Baru, also declared that the country has seen the last of fuel scarcity, stating that it had put machineries in place to ensure adequate supply of petroleum products in 2018 and beyond. Commenting on the crude oil term contract, he stated that the bids would be evaluated within three to four weeks, while consent and approval would be secured from the authorizing agency before winners are announced. He insisted that only the best companies that meet certain criteria, among which are geographical spread and financial capability, would be selected. He added that that the companies which would be selected would be lifting about 14 cargoes of Nigeria’s crude oil every month, according to its schedule. The essence of this, according to Baru, was in line with its focus to enhance its production volumes, while ensuring that the best value is realized through competitive marketing of its various crude oil grades to international refineries and traders. To guarantee this, he stated that the NNPC is collaborating with key stakeholders to improve the overall security of its production sites, crude oil export lines and other critical oil and gas infrastructure. However, the NNPC boss disclosed that the crude oil term contract is not a procurement contract, but a process of selecting partners for the sales and procurement of NNPC equity crude oil volumes. He said, “The opening of the bids before the entire world is indicative of NNPC’s commitment to President Muhammadu Buhari’s drive for transparency and accountability in the conduct of government business. This is the third bid process the coming of this administration. “Over the years, we have established processes that have enabled the engagement of the best partners and guaranteed full automation and recovery of the full value of all crude oil lifted. We have also promoted greater participation of Nigerian enterprises while preserving world class standards.” Baru charged the companies not to tow the path of their downstream counterparts in sabotaging government’s efforts at ensuring fuel supply among others. He said, “We have a recent challenge with supply of petroleum products, and unfortunately, our downstream counterparts have been very unpatriotic in creating the problem, I am happy to announce that this problem has been dealt with and the few pockets of non-compliance have also been tackled. “It is most unfortunate that our industry through the aid of a few bad eggs have made last year’s Christmas celebration a pain for those who were celebrating. You are on the upstream side and some of you have affiliates, we hope you would not be part of this unfortunate incident and in future, would endeavour to assist in ensuring that such a thing never happens again. “NNPC is ever determined to ensure that in 2018, we will not have any repeat of the period of fuel shortage that surfaced in 2017. Definitively, we have seen the last of it.” To qualify for the allocation, which would be done once every month to the successful companies in the 12-month period, Group General Manager in charge of the Crude Oil Marketing Division, Mr. Mele Kyari, said the companies must present their 2015, 2016 and 2017 audited accounts and as well provide evidence of their tax clearance certificate. He said the companies must have a minimum annual turnover of $500 million and a net worth of $250 million for 2016, as well as show ability to establish an Irrevocable Letter of Credit (LC) subject to contract terms. , especially as the crude oil would be offered to the companies on credit basis and the NNPC wants evidence that it would get payment for the commodity.


Credits/Sources: www.vanguardngr.com