The Nigerian National Petroleum Company Limited (NNPC) has come under scrutiny for its handling of the award of contract to four companies for the rehabilitation of the country’s pipelines, depots and other downstream critical infrastructure.
The state-owned oil company is in the eye of the storm following BusinessDay’s exclusive report on the award of new petroleum pipeline contracts to Oilserv Limited, A.A RANO Nigeria Limited, Macready Oil & Gas Service Company Limited, and MRS Oil Nigeria Plc, which triggered an uproar from industry operators.
Industry stakeholders and experts have raised concerns about the transparency and fairness of the contract allocation process of the Design, Finance, Rehabilitate, Build, Operate and Transfer model.
Experts who spoke to BusinessDay said the two downstream firms, MRS Oil Nigeria Plc and A.A RANO Nigeria Limited, that won pipeline contracts would have a competitive advantage over others.
Five bidders among the over 200 applicants for the pipeline contracts who spoke to BusinessDay alleged that the NNPC ignored standard procedures in its dealings with retailers that won pipeline contracts.
“NNPC Ltd deviated from the standard evaluation protocol by sidelining key stakeholders like the Infrastructure Concession and Regulatory Commission (ICRC), Ministry of Justice, Bureau for Public Procurement, and other project delivery team members (PDT) in picking the retailers that emerged winners,” a source who was part of the bid process told BusinessDay.
“This has fuelled allegations that the process may not have been conducted with the required level of accountability,” he added.
BusinessDay had on Wednesday exclusively reported that the NNPC had selected Oilserv Limited, A.A RANO Nigeria Limited, Macready Oil & Gas Service Company Limited, and MRS Oil Nigeria Plc as preferred bidders for the rehabilitation of NNPC downstream pipelines and associated depots and terminal infrastructure through build operate, and transfer (BOT) to cover the four lots.
The four lots are LOT 1: Port Harcourt Refinery-related infrastructure; LOT 2: Warri Refinery-related infrastructure; LOT 3: Kaduna Refinery-related infrastructure; and LOT 4: Atlas Cove–Mosimi/Satellite-related infrastructure.
Another source familiar with the bidding process said market watchers were shocked about the emergency of a company that did not participate in the bidding process but was declared the winner.
“LOT 2 was awarded to a retail company, despite reports that the company did not participate in the bidding process for this specific LOT. The preferred winner for LOT 4 did not make it to the financial bid tender but they were allotted LOT 4,” the source said.
He noted that such deviations from standard practices have raised concerns about the integrity of the contract allocation process and the potential for favouritism.
“The allegations surrounding the pipeline contracts underscore the need for a thorough review of the contract allocation process to ensure that it adheres to established industry standards and best practices,” another source who pleaded anonymity said.
The NNPC had yet to provide a response as at the time of publication.
Experts said Nigeria’s pipeline network rehabilitation project, which aims to facilitate crude supply to refineries and product evacuation, is of paramount importance to the energy sector.
“A secure and reliable pipeline system is crucial for the country’s efforts to address supply shortfalls and enhance the operational efficiency of its refineries seamlessly,” Daniel Ogbeide, an energy analyst, told BusinessDay.
“As Nigeria seeks to transition from a state monopoly to a more diversified and competitive energy landscape, it is essential that transparency and accountability remain at the forefront of all operations,” he added.