NNPC invites tenders from prospective traders of Nigeria’s crude for 2019

The Nigerian National Petroleum Corporation (NNPC) has invited tenders from prospective traders in Nigeria’s crude and importers of petroleum products under its 2019-2020 fuel supply programme.

An invitation to tender published on the corporation’s website says the NNPC intends to engage only qualified and credible companies in its direct sale of crude oil and direct purchase of petroleum product (DSDP) to ensure sustained supply of petroleum products in the country.

The NNPC said the invitation to tenders was in line with its policy and procedures enshrined in its enabling Act (LFN Cap.320) and in compliance with the Public Procurement Act 2007.

In January 2018, bids were received from about 254 indigenous and foreign companies that showed interest in a similar exercise.

In May 2018, the list of 50 international and indigenous companies believed to have been awarded the contracts by the NNPC was published in the media.

Murky 2018 process

But, the NNPC spokesperson, Ndu Ughamadu, promptly dismissed the list as fake. Mr Ughamadu, who described the list in circulation as “not official”, asked PREMIUM TIMES then to wait for the authentic list when selection process would be completed.

Since then, on more than three occasions this newspaper has requested from the NNPC for the official list of the beneficiaries from the contract awards without any positive response.

Last month, the General Manager, Crude Oil Marketing Department of the NNPC, Melee Kyari, said the official list has not been made public because “some Nigerians were using it to blackmail government by reading political motives to every name.”

But, civil society groups have always criticised NNPC’s refusal to make the list available to the public.

The Lead Director, Centre for Social Justice (CENSOJ), Eze Onyekpere, said NNPC’s refusal to upload in its website all information relating to the contract award process, from invitation to tender to the final list of companies awarded the contracts was a discredit to the corporation’s claim to transparency and accountability.

“The NNPC must always walk its talk, by ensuring all aspects of its operations, particularly as they relate to contract awards, are transparently handled,” Mr Onyekpere said.

2019/2020 Guidelines

Regardless, the NNPC has released fresh guidelines for prospective bidders under the 2019/2020 contract term scheduled to last for one year. Previous contracts usually last for two years.

According to the NNPC’s invitation to tender published in its website, tenders must be from “interested and credible companies” with minimum turnover of $500 million (or the Naira equivalent) and net worth of $250 million (or the Naira equivalent) for the year 2017 or 2018 financial year.

The three categories of operators include established international crude oil end users who own a refinery with the capacity to process Nigerian crude oil grades.

Also, the company must have a Nigerian affiliate or in partnership with a subsidiary with experience in downstream oil and gas business, particularly petroleum products trading.

The guidelines stipulates that the affiliate companies must have a minimum turnover of $65 million (or the Naira equivalent), with a net worth of $32.5 million (or the Naira Equivalent).

Besides, the NNPC said those in the second category must be established and globally recognised large volume petroleum product trading company with a Nigerian affiliate or subsidiary experienced in downstream oil and gas business, particularly petroleum products trading.

The NNPC said all affiliates or subsidiaries must be legal entities which directly or indirectly owns and controls at least 50 per cent of the issued shares or voting rights in the company.

The other category consists of indigenous companies engaged in Nigerian oil and gas downstream activities with expertise in trading in petroleum products, with minimum turnover of $400 million (or the Naira equivalent) and net worth of $200 million (or the Naira Equivalent).

Shortlisting

To qualify for shortlisting, the NNPC said interested bidders must submit evidence of registration, including certificate of incorporation by Corporate Affairs Commission (CAC) (for Nigerian companies), or similar agencies (for foreign companies).

Other documentations include certified true copies of Memorandum and Articles of Association of the company indicating ownership structure of company, name(s) of directors, major shareholders and percentage shareholding.

Also, the company’s profile must show full details of its demonstrable capabilities; three years company tax clearance certificate (2016, 2017 and 2018 for Nigerian companies), or similar tax certification documents for foreign companies, or evidence of exemption from the respective authorities.

The companies are equally expected to present their current Pension Clearance Certificate as evidence of compliance with Pension Reform Act 2004; evidence of compliance with the Nigeria Social Insurance Trust Fund (NSITF) Act 2010 and Industrial Training Fund (ITF) Amendment Act 2011 as well as registration on the Bureau of Public Procurement (BPP’s) National Data Base of Federal Contractors, Consultants and Service Providers (NDCCSPs).

Apart from certification from the Department of Petroleum Resources, (DPR), prospective bidders must show evidence of compliance with the Nigerian Content Act in the areas of patronage of Nigerian shipping companies, insurance and legal services as well as banking and financial services.

Those awarded the contract at the end of the exercise would be expected to utilise crude oil supplied by the NNPC every month to produce and deliver petroleum products of Nigerian standard specification on delivered at designated place (DAP) basis.

“The petroleum products to be delivered shall be equivalent in value to the crude oil received from NNPC subject to the general terms and conditions as would be advised to successful companies subsequently via term sheet (TS),” the NNPC guidelines noted..