Thursday, 27 August 2015

NNPC Cancels Crude Supply Contracts To Refineries

The Nigeria National Petroleum Cooperation (NNPC) has cancelled the current contracts on the supply of crude to the nation’s refineries.

The move according to the cooperation is to curb the exorbitant cost and inappropriate process of engagement.

While that subsist, NIDAS Marine Limited, a subsidiary of the NNPC has been engaged to provide crude delivery service on negotiated industry standard rate pending the establishment of substantive contracts.

When another contract is in place, it will be the delivery of crude to the refineries by marine vessels rather than through the pipeline network, which the corporation says is susceptible to vandalism.

In the same vein, the Corporation also terminated the Offshore Processing Agreements (OPA), entered into in January, 2015 with three companies, namely- Duke Oil Company Inc., Aiteo Energy Resources Limited and Sahara Energy Resources (Nig) Ltd, claiming that the current OPA is skewed in favour of the companies’ such that the value of product delivered is significantly lower than the equivalent crude oil allocated for the programme.

To the alternative, the NNPC has invited Messrs. Oando, Sahara Energy, Calson, MRS, Duke Oil, BP/Nigermed and Total Trading to bid for the new Offshore Processing agreement.

On the status of the Crude for Product Exchange Agreement (SWAP) reportedly entered into by the NNPC and some oil traders, the Corporation informed that the last SWAP arrangement lapsed in December, 2014 and was never renewed.

Meanwhile, a tendering process for the 2015/2016 Crude Oil Term Contract for the evacuation of Nigeria’s crude oil equity from the various crude and condensate production arrangements will soon be commenced.