Thursday, 27 August 2015

NNPC Stops Crude Oil Delivery To Refineries

The Nigerian National Petroleum Corporation (NNPC) has cancelled the delivery of crude oil to the refineries in Warri, Port Harcourt and Kaduna.

The NNPC also cancelled the Offshore Processing Agreements with Duke Oil Company Inc, Aiteo Energy Resources Limited and Sahara Energy Resources Limited.

The Punch reports that under the agreements, the corporation allocated a total of 210,000 barrels of crude oil per day for refining at offshore locations in exchange for petroleum products at a pre-agreed yield pattern.

The petroleum corporation stressed that the decision to cancel the oil delivery contracts to refineries was taken after a proper evaluation of the contract terms. The NNPC added that the cancellation is due to exorbitant cost and inappropriate process of engagement.

According to the experts, the new measures are aimed at cost reduction and to strengthen operational efficiency across its value chain.

The statement says: “We have also commenced a rigorous and transparent process of securing capable and competitive contractors for the delivery of crude oil by marine vessels to Port Harcourt and Warri/Kaduna refineries, pending the restoration of the crude pipeline infrastructure.”

The organization explained that it resorted to the delivery of crude oil to the refineries by marine vessels following incessant attacks on the Bonny-Port Harcourt refinery pipeline and the Escravos crude pipelines by vandals and oil thieves, resulting in the complete unavailability of the pipelines in 2013.

The NNPC said that it had obtained the permission of President Muhammadu Buhari to kick-start the 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.

“The process, which would commence with the advertisement of the crude oil term contract in both national and international print media for a period of one month, had been carefully structured to weed out briefcase companies’and rent seekers,” it added.

It is important to note that before this step President Muhammadu Buhari has terminated the controversial offshore dispensation and oil swap agreements launched by the government of Goodluck Jonathan.