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NNPC Cancels Crude Delivery To Refineries, Offshore Processing Contracts

 

NNPCThe Nigerian National Petroleum Corporation (NNPC) has cancelled the contract for the delivery of crude oil to the nation’s refineries in Warri, Port Harcourt and Kaduna.

The corporation also announced the termination of the Offshore Processing Agreements (OPA) entered into in January 2015, with three companies, namely, Duke Oil Company, Aiteo Energy Resources Ltd, and Sahara Energy Resources.

Under this controversial agreement, NNPC allocates 210,000 barrels of crude oil per day for refining at offshore locations in exchange for petroleum products at a pre-agreed yield pattern.

Consequently, 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 while it has engaged Aiteo, Sahara Energy and Duke Oil to exit the current OPA.

Announcing the new measures in a statement Wednesday, the NNPC said that it is aimed at cost reduction and strengthening of operational efficiency across its value chain.

Mr Ohi Alegbe, NNPC spokesman, said in a statement that after proper evaluation and in line with the terms of contract for the delivery of crude oil to the nation’s refineries, the decision was reached to cancel the contracts due to the exorbitant cost and inappropriate process of engagement.

“As a stop-gap measure, a subsidiary of the NNPC, the NIDAS Marine Ltd, has been engaged to provide crude delivery services on negotiated industry standard rate pending the establishment of a substantive contract.

“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 the Port Harcourt and Warri/Kaduna refineries pending the restoration of the crude pipeline infrastructure,’’ the corporation said.

The NNPC, however, explained that it resorted to the delivery of crude oil to the refineries by marine vessels following the 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.

-Leadership

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