Business

NNPC terminates GEJ’s oil swap contracts

The Nigeria National Petroleum Corporation (NNPC) has terminated the Offshore Processing Agreements (OPAs) contracts awarded to some companies during the last administration of President Goodlucck Jonathan.
Among the affected companies are Aiteo Energy Resources Limited and Sahara Energy Resources Limited.
They were engaged in January 2015 to carry out crude oil swap, a process whereby crude oil is refined at offshore locations in exchange for petroleum products at pre-agreed yield pattern.
The two companies were said to have enjoyed robust government patronage during Jonathan’s administration because of the closeness of the managements to the immediate former Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, who was regarded as the ‘super’ Minister of Jonathan’s administration.
The NNPC explained that the termination of the contract was as a result of shortfall in the value of products delivered as compared to the crude oil allocated for the programme.
Besides, it noted that the agreement was skewed in favour of the companies.
“After detailed appraisal of the operation and its term of agreement, the NNPC is convinced that the current OPA is skewed in favour of the companies such that the value of the product delivered is significantly lower than the equivalent crude oil allocated for the programme” Ohi Alegbe, the NNPC spokesman said that in a statement on Wednesday.
He added that the NNPC also observed that the structure of the agreement does not guarantee unimpeded supply of petroleum products because the delivery terms were not optimal.

Read also: NNPC moves to plug leakages, reviews PSC, JVs

The OPA of Duke oil, a subsidiary of NNPC, was also not spared by the corporation.
According to Alegbe, the NNPC has already commenced the process of establishing alternative OPA and has invited some companies for bidding.
“After due appraisal of performance trajectory, we have invited Messrs. Oando, Sahara Enery, Carlson, MRS, DukeOil, BP/Nigermed and Total Trading to be bid for the new Offshore Processing Agreement while AITEO, Sahara Energy and Duke Oil to exist the current OPA” he said.
The companies which operated the OPA were usually allocated 210,000 barrels of crude oil per day.
Petroleum products have been at the centre of alleged massive corruption ravaging the country in the recent past.
President Muhammed Buhari has however declared his avowed commitment to rid the country of the malaise.

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