278 firms bid for Nigerian crude oil grades

A total of 278 bids were submitted by indigenous and foreign firms seeking to secure contract for the sale and purchase of the 26 Nigerian crude oil grades on offer.

The process, covered live by all major television networks in Nigeria, had in attendance representatives of the bidding companies with officials of the Bureau of Public Procurement (BPP), Department of Petroleum Resources (DPR), Nigerian Extractive Industry Transparency Initiative (NEITI), Nigerian Content Development and Monitoring Board (NDCMB), as well as members of the civil society in attendance as independent assessors.

Ibe Kachikwu, group managing director, NNPC, speaking at the flag-off of the event, said the essence of the public opening of the bid was to consolidate on the new promise of setting a new agenda for the corporation anchored on the tenets of transparency and efficiency, in line with President Muhammadu Buhari’s agenda for the oil and gas industry.

“The essence is to ensure that nobody needs to call me personally as Ibe Kachikwu for him to get crude allocation. So you can imagine the burden it takes off my shoulders. It means a good amount of my time will now go into other relevant areas of operation where the country needs me most, ’’ Kachikwu said.

Commenting on the process, Mele Kyari, group general manager, Crude Oil Marketing Division of the NNPC, said that with the new measure put in place, the incidence of briefcase companies and hawking of Nigerian crude would become a thing of the past.

“The idea is to select companies that are credible, capable, with track record and would not go to hawk our crude. We are going to get as close as possible to the end users of our crude. What this means is that we are going to eliminate all those transactions that are not necessary,’’ Kyari said.

Folashade Odunuga, representative of the Department of Petroleum Resources (DPR), commended the NNPC for the transparent manner it conducted the bid process, noting that as the regulator of the industry, the DPR was impressed with the new wave of transparency sweeping across the value chain of the Corporation.

The contract for the engagement of qualified and reputable companies for the sale and purchase of Nigerian crude oil grades is conducted in consonance and in pursuance of the provisions of the Public Procurement Act 2007 and the BPP guidelines.

As part of the pre-qualification requirements, interested companies are expected to demonstrate the possession of minimum annual turnover of $750 million and net worth of at least $300 million, ability to establish an irrevocable Letter of Credit for the payment of any allocated crude oil subject to the contract terms as well as the ability to pay an initial deposit of $2.5 million representing the first lifting deposit upon signing of the contract agreement, among other requirements.

The 26 grade of Nigerian crude oil on offer include: Bonny Light, Forcados Blend, EA Blend, Bonga, Qua Iboe Light, Yoho Blend, Erha and Escravos Light. Others are; Pennington Light, Agbami, Brass Blend, Abo, Oyo, Okono Blend, Amenam Blend, Akpo Condensate and Usan. The rest include: Atam Blend, Okwori, Okoro, Ima, Ukpokiti, Obe, Okwuibome, Ebok and Asaratoru

Olusola Bello