NNPC cancels OPA bids, adopts direct sales

In from Success Allantee (Nation’s capital) . . .
In what appears as a drastic policy turnaround, the Nigerian National Petroleum Corporation, NNPC, Tuesday, announced that it has stopped the Offshore Processing Arrangement, OPA, replacing it with the Direct Sale-Direct Purchase (DSDP) programme.
The NNPC stated this in a statement issued by its Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe, who stated that replacement of the OPA with the more efficient DSDP was targeted at achieving greater transparency and eliminating the activities of middlemen in the crude oil exchange for product matrix.
In the past, what obtained was the OPA where middlemen facilitate the direct purchase of crude products.
The statement further disclosed that with the new development, the call for commercial bids issued to the 44 shortlisted bidders, made up of 34 international firms and 10 indigenous companies have been withdrawn, adding that the Direct Sale-Direct Purchase alternative allows for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.
The NNPC explained that it took the decision after an evaluation exercise of the pre-qualified bidders revealed that most of the 44 companies earlier shortlisted for the next stage of the tender process only had affiliations to refineries abroad a situation which introduces toll on the value chain.
The corporation further added that if it allowed the initial arrangement to subsist, it would in turn constitute a significant value loss to the country by way of accruals.

Read also: NNPC opens bid rounds for 278 firms

The statement said: “In this regard, only bona fide owners of Refineries identified in the ongoing OPA Tender Evaluation process will be further engaged. The identified Refineries will be subjected to due diligence and analysis by NNPC appointed consultants to confirm suitability in line with International best practice.”
It will be recalled that the NNPC, had last month conducted the public opening of bids tendered by a total of 101 Nigerian and multi-national companies competing for the award of Offshore Processing Arrangements, OPA.
Under the OPA, the NNPC is expected to allocate an agreed volume of crude oil for refining at offshore locations in exchange for petroleum products at pre-agreed yield pattern.

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