The Nigerian National Petroleum Corporation (NNPC) has selected 26 companies comprised of both foreign and local firms, as well as 12 countries to lift the country’s crude oil for the next two years, pursuant to its crude term contracts.
The crude term contracts, known as Direct Sale, Direct Purchase (DSDP) will run from 2021 through 2023, while the selected countries would operate on a Government-to-Government (G2G) basis to purchase the commodity from the national oil company.
The preferred companies include Sahara Energy Resources Limited; Oando; Duke Oil (an NNPC subsidiary); Petrogas; AA Rano; MRS; Mercuria and Vitol; Oceanbed Trading Limited; Levene Energy; Bono Energy; Mocoh Energy; BP Oil; West Africa Gas Limited; Litasco SA; Emadeb; Hyde; Matrix and Brittania-U.
Other names listed by the NNPC as having qualified for the contracts included Masters Energy; AMG; Casiva; Barbedos; Trafigura; Hindustan and Patermina.
The companies that made the list include South Africa; China; Niger; Cote D’voire; Ghana; India; Togo; Sierra Leone; Liberia; Turkey; Senegal; and Fujaira.
Entities qualified to take part in the contract bid are in four categories, namely bonafide end user who owns a refinery and or retail outlets that can process Nigerian crude oil grades. For the government to government contracts, bidding nations must provide proof that the entity is wholly owned by the relevant country or provide evidence of a bilateral agreement with the designated nation.
The third category is the internationally established and globally recognised large volume crude oil traders, while the fourth classification are indigenous companies engaged in Nigeria oil and gas downstream business activities.
In addition, qualifying foreign companies must demonstrate a minimum annual turnover of $500 million or the naira equivalent and a net worth of not less than $250 million or the naira equivalent for the previous financial year.
For indigenous firms, they are required to have a minimum turnover of $200 million or the naira equivalent and a net worth of $100 million for the preceding financial year ending.
Bidders are also to show their ability to handle supplies of crude and must list facilities and products processed or sold over the last three years, in addition to disclosing links to NNPC or the Bureau of Public Procurement (BPE) and confirming that directors have not been convicted of fraud or financial impropriety.
As with all Nigerian tenders, NNPC also highlights that the local content law must be strictly adhered to in terms of, among others, the use of Nigerian shipping companies, insurance and banks where possible