NNPC cancels refinery crude delivery, offshore processing contracts

The Nigerian National Petroleum Corporation (NNPC) has cancelled the contract for the delivery of crude oil to the 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 Limited, and Sahara Energy Resources.


Under this controversial agreement, the NNPC allocates a total of 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 issued yesterday, the NNPC said that it is aimed at cost reduction and strengthening of operational efficiency across its value chain.


In the statement signed by its spokesman, Ohi Alegbe, the corporation stated 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 contract due to the exorbitant cost and inappropriate process of engagement.


“As a stop-gap measure, a subsidiary of the NNPC, the NIDAS Marine Limited, 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 stated.


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.



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