NNPC explains why it is yet to announce winners of oil lifting contracts

The Nigerian National Petroleum Corporation (NNPC) has explained why the result of the bid for the Direct Sale – Direct Purchase (DSDP) contract bids is yet to be announced.

The DSDP arrangement is a model introduced last year, and is carried out through direct sales of crude oil to refiners or consultants, who in turn supply the NNPC with the equivalent worth of products. The batch over which the bids were opened is scheduled to last for the next one year, starting from April 1, 2017.

According to Ndu Ughamadu, the corporation’s group general manager, public affairs, winners are yet to emerge because the corporations is still going through the documents submitted by the firms that participated in the bid

Ughamadu said the documents submitted for verification are many and as result, it would require some time to go through them before winners can be declared.

No fewer than 128 Indigenous and International Oil and Gas companies have indicated interest to participate in the DSDP programme.

Maikanti Baru, group managing director of NNPC, was quoted s saying that the DSDP had saved over $500 million, particularly through reduction in the amount paid on demurrage by the corporation.

Baru described the DSDP as a major component of the NNPC’s petroleum products supply portfolio, stressing that since inception, it has greatly helped in the stabilisation of product supply to the nation.

“The DSDP programme has ensured that the supply from the refineries is fully augmented to meet national supply and sustained over 30 days sufficiency of Premium Motor Spirit (PMS) otherwise known as petrol,” he said.

Touting the transparency of the programme, he said the DSDP arrangement was a major instrument of partnership between the NNPC and product suppliers, both local and international, adding that over the last one year, significant lessons have been learnt, which have been incorporated into the tender process, in order to improve quality assurance.

“One of the cardinal principles of the NNPC, under my leadership, is the entrenchment of measures that will ensure transparency, accountability, performance and profitability, in line with our FACTI principle of a Focused, Accountable, Competitive, Transparent Organisation, conducting its business with integrity as enshrined in our 12 Business Focus Areas (BUFA),” Baru said.

According to him, the DSDP programme was a major instrument for the attainment of this cardinal objective, which he declared would be guided by the overriding public interest and in compliance with extant laws and regulations.

According to the statement, Mele Kyari, the Group General Manager, Crude Oil Marketing Division, Mele Kyari, said the tender process was to optimise revenue for the Federal Government, in compliance with the anti-corruption drive of the government, adding that yardsticks for successful bidders would include, possession of financial strength, cognate experience in crude oil business, as well as competence to deliver on mandate.

He noted that the DSDP was adopted to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement, so as to introduce and entrench transparency into the crude oil for product transaction by the corporation, in line with global best practices.

Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.

The DSDP option eliminates all the cost elements of middlemen and gives the NNPC the latitude to take control of sale and purchase of the crude oil transaction with its partners, adding that the initiative would save $1billion for the Federal Government.

 

Olusola Bello