The Nigerian National Petroleum Company (NNPC) Limited has debunked underhand dealings in the award of contracts to AA Rano Nigeria Limited, MRS Oil Nigeria Plc, Oilserv Limited and Macready Oil & Gas Service Company Limited for the rehabilitation of pipelines across the country.
“We would like to state categorically that these reports are fallacious and designed to bring the good name of the Company into disrepute,” the state-owned oil company said in a release dated October 8, 2023.
According to the NNPC, it is crucial to provide accurate information to address any misconceptions and ensure transparency in our operations.
Last week, it was reported that the NNPC awarded new contracts to four companies, including two downstream firms, for the rehabilitation of the country’s pipelines. A development that has sparked criticisms from industry operators.
Industry experts told BusinessDay that it is an anomaly for downstream retailers to win pipeline contracts. “In the US market, pipeline operators are separated from retailers,” a business leader in Nigeria’s energy sector said. “Whether by accident or deliberate regulatory constraint, no single company sits astride the entire value chain.”
BusinessDay found that some of the biggest US pipeline companies such as Kinder Morgan, Williams Company, and Colonial Pipeline are midstream operators with no retail outlets.
However, the state-owned oil company has denied any wrongdoings in the process of awarding of the contracts to these four companies which emerged as preferred bidders for the maintenance of the pipelines, through the build, operate, and transfer financing model to facilitate crude supply to the refineries and products evacuation from them.
“These contracts, which were advertised, were awarded based on rigorous evaluation criteria and in line with industry norms. NNPC Limited is deeply committed to adhering to the highest standards of transparency and global best practices in all our activities, which contains our contracting process.
“To re-emphasise our commitment to transparency, NNPC subjected the selection process to a competitive tender guided by Bureau of Public Procurement (BPP) standards, Infrastructure Concession Regulatory Commission expertise, and the active involvement of a Transaction Advisor.
“We also had representations from NEITI and the Ministry of Justice in the project development team and the evaluation exercise,” the NNPC said.
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.
“It is imperative to emphasise that these contracts are Build, Operate and Transfer agreements, and selected partners are to finance the rehabilitation and do not entail the transfer of control of these assets to any particular company.
“Our objective is to enhance the integrity and functionality of the pipelines to facilitate the efficient transportation of crude oil to refineries and the distribution of its products across the country.
“The ownership of these strategic national assets remains with NNPC Limited, and we are fully committed to ensuring their continued operation in the interest of over 200 million Nigerians.”
The state-owned oil company said it is ready to provide additional information to anyone who wants to make inquiries. “Please do not hesitate to contact us. We are always open to engaging in constructive dialogue with all stakeholders.”