The Nigerian National Petroleum Corporation (NNPC) wednesday
confirmed the cancellation of the Offshore Processing Agreements (OPAs) between
the corporation and Sahara Energy Resources (Nig.) Ltd. founded by the trio of
Mr. Tope Sonubi, Mr. Tonye Cole and Mr. Ade Odunsi; Aiteo Energy Resources
Limited founded by Mr. Benedict Peters; and Duke Oil Company Inc., a subsidiary
of NNPC.
It also announced the cancellation of the contract for the
delivery of crude oil to the Port Harcourt, Warri and Kaduna refineries awarded
to Ocean Marine Tankers (OMT) Limited, a company founded by the Skye Bank
Chairman, Mr. Tunde Ayeni, Edo State business mogul, Capt. Hosa Okunbor, and
others.
NNPC explained in a statement signed by its spokesman Ohi
Alegbe that the decision to cancel the crude delivery contract with Ocean
Marine to the refineries was aimed at reducing cost and strengthening
operational efficiency across the corporation’s value chain.
The NNPC stated that after proper evaluation and in line
with the terms of the contract for the delivery of crude oil to the nation’s
refineries in Warri, Port Harcourt and Kaduna, the corporation has cancelled
the current contract due to its exorbitant cost and inappropriate process of
engagement.
The corporation noted that as a stop-gap measure, NIDAS
Marine Limited, a subsidiary of the NNPC has been engaged to provide crude
delivery service 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 Port Harcourt and Warri/Kaduna refineries, pending the
restoration of the crude pipeline infrastructure,” the corporation stated.
The NNPC explained that it resorted to the delivery of crude
oil to the refineries by marine vessels following 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.
NNPC renewed its contract with OMT Limited last year for the
delivery of crude to its refineries.
In addition to operating a very large crude carrier (VLCC)
with the capacity to convey two million barrels of crude oil, the company owns
two transshipment vessels – MT Abiola and MT Igbinosa – named after the wives
of the founders, which transships the crude oil from the VLCC to the depots at
the Warri and Port Harcourt refineries. Ironically, crude oil is then piped
through the Escravos pipeline (System 2) to the Kaduna refinery.
Early this year, the contract was disrupted when NNPC
engaged traders for the OPAs. The contract was restarted in July when the
refineries resumed production.
However, concerns have been raised that conveying crude oil
using marine vessels is a much costlier alternative to the movement of crude to
the refineries through NNPC’s pipeline network.
Industry observers have advised that NNPC should repair its
pipelines, involve the communities in securing the network and reinforce it
with an automated system against vandalism as a cost-effective means of getting
crude oil to the refineries.
The corporation also announced the termination of the OPAs
entered into in January 2015 with Duke Oil, Aiteo Energy and Sahara Energy.
Under the agreement, NNPC allocated a total of 210,000
barrels of crude oil per day for refining at offshore locations in exchange for
petroleum products at pre-agreed yield pattern.
“However after detailed appraisal of the operation and its
terms of agreement, the NNPC is convinced that the current OPAs are skewed in
favour of the companies such that the value of products delivered is
significantly lower than the equivalent crude oil allocated for the programme,”
NNPC said.
NNPC’s statement confirmed allegations that the value of the
products delivered were not commensurate with the crude oil lifted by the
traders.
The NNPC also observed that the structure of the agreement
does not guarantee unimpeded supply of petroleum products, as delivery terms
were not optimal.
To address these lapses, NNPC said that it had commenced the
process of establishing alternative OPAs based on optimum yield pattern with
tender processing fees.
“After due appraisal of performance trajectory, we have
invited Messrs. Oando, Sahara Energy, Calson, MRS, Duke Oil, BP/Nigermed and
Total Trading to bid for the new Offshore Processing Agreements while we have
engaged Aiteo, Sahara Energy and Duke Oil to exit the current OPAs,” it stated.
On the status of the crude-for-product exchange agreements
(oil swaps) reportedly entered into by NNPC and some oil traders, the
corporation disclosed that the last swap arrangements lapsed in December, 2014
and were never renewed.
NNPC added that it had obtained the permission of President
Muhammadu Buhari to kick-start the tendering process for the 2015/2016 crude
oil term contracts for the evacuation of Nigeria’s crude oil equity from the
various crude and condensate production arrangements.
The corporation noted that the process which would commence
with the advertisement of the crude oil term contracts in both national and
international print media for a period of one month has been carefully
structured to weed out “briefcase companies” and rent seekers.
Credit: Thisday
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