A total of 101 local and multinational oil firms, including international oil trading companies; Glencore, Vitol S.A, BP Oil International and Total Oil Trading S.A, have begun competition to grab contracts for the Nigeria’s Offshore Processing Agreement (OPA).
The winners of the bids will lift about 210,000 barrels of Nigeria’s crude oil and swap the volume with proportionate metric tonnes of refined products within a 12-month period, starting from January 2016.
The Nigerian National Petroleum Corporation (NNPC), which yesterday conducted public bids tender for the contracts, described the OPAs as important in the light of the inefficient refining capacity of the country.
In the OPA, the NNPC undertakes to allocate a dedicated volume of crude oil for refining at offshore locations in exchange for petroleum products at preagreed yield pattern.
The bidding, which was witnessed by representatives of the Nigerian Extractive Industry Transparency Initiative (NEITI), executives of the bidding companies and other crucial industry stakeholders, was a departure from the previous OPA award exercises, which were conducted without public participation.
NNPC Group Managing Director, Dr. Ibe Kachikwu, said at the occasion that the oil corporation made the bidding process open to public scrutiny in conformity with its transparency policy.
“At the end of this exercise, we must be able to engage companies that are known to everybody and not shrouded in mysteries. We must have terms that are very transparent and comparative to terms anywhere else in the world where OPA are being done,” Kachikwu said. According to him, while the NNPC is working to ensure that the refineries are re-streamed to optimal levels, it will, in the interim, maximise the OPAs to secure the best deals possible for Nigeria.
“I hope that we should be able to build in futuristic growth patterns in the new deal. We should be able to come up with companies that have solid investments in Nigeria because this is not just a trading issue,’’ he added.
Kachikwu expressed optimism that the current bid process would present an opportunity for the best companies to emerge, adding that the NNPC is concerned with companies with known record of accomplishment, solid investments in Nigeria as well as with global recognition and access to refineries.
He stated that the NNPC is hoping that this would be the last bid process for OPA, especially as it is expected that the nation’s refineries would resume production soon. Commenting on the exercise, a representative of the Executive Secretary of NEITI, Mrs. Murjanatu Gamawa, commended the NNPC for the giant step taken towards transparency and accountability. She said this was the first time NEITI would be invited to witness a bid process at the NNPC, adding that it is a clear indication that NNPC takes transparency and integrity issues seriously.
Also, Managing Director of the Pipelines and Products Marketing Company Limited (PPMC), a subsidiary of the NNPC, Mrs. Esther Nnamdi-Ogbue, stated that the essence of the exercise was to provide a level playing field for all industry players and to cut off intermediaries who have been exploiting the system.
The bidding for the OPA contracts came three months after the Federal Government cancelled all offshore crude oil processing agreements and crude oil swap deals for refined petroleum products between the NNPC and oil traders.
Presidential spokesperson, Mr. Femi Adesina, had last August said President Muhammadu Buhari approved the immediate cancellation of the agreements.
The Ahmed Joda-led Presidential Transition Committee had recommended to the Buhari administration to carry out a comprehensive audit of all OPAs and crude oil swap deals entered into by the NNPC.
The committee had said the audit would help government identify and claim any reimbursements for excess crude oil lifted under the controversial OPA and swap arrangements to establish the quantity of products delivered based on a fair and transparent audit process.
