NNPC abandons OPAs for direct crude oil sales

By Odunewu Segun

Nigerian National Petroleum Corporation said it has suspended the offshore Processing Agreement (OPA) arrangement and instead opted for Direct Sale-Direct Purchase (DSDP) of its crude and products with identified refineries.

NNPC in a statement from its Group General Manager Public Affairs, Ohi Alegbe, in Abuja explained that the decision was part of a major effort to enshrine transparency and eliminate the activities of middlemen in its participation in the crude oil exchange for product matrix.

It also noted that the replacement of the OPA option in preference for what it described as the more efficient DSDP alternative was because the DSDP would allow the direct sale of crude oil by it, as well as direct purchase of petroleum products from credible international refineries.

It however said in the statement that it opted for the DSDP after its evaluation of the pre-qualified bidders revealed that most of the 44 companies it earlier shortlisted for the next stage of the tender process only had affiliations to refineries abroad.

It said that it was thus not comfortable with such situation because it introduces toll on the entire value chain, adding that if allowed to subsist, the development would in turn constitute a significant value loss to the federation by way of accruals.

This is new development is coming barely 18 days after about 101 companies submitted their technical bids for consideration in the Offshore Processing Agreement contract with the NNPC.

“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,” the statement quoted the corporation to have said.

NNPC further said that its call for commercial bids issued to the 44 shortlisted bidders which are made up of 34 international firms and 10 indigenous companies had subsequently been withdrawn.