​NNPC discards offshore processing arrangement for Nigeria’s crude

An oil vessel used to illustrate the story An oil vessel used to illustrate the story
An oil vessel used to illustrate the story

The Nigerian National Petroleum Corporation, NNPC, on Tuesday announced it ha​d​ jettisoned the controversial Offshore Processing Arrangement in petroleum products supply in the country.

The OP​A​, which became popular under former President Goodluck Jonathan administration, had attracted serious criticisms from Nigerians, who said it was difficult to get commensurate value of petroleum products from the volume of crude oil allocated for refining.

In place of the OPA, Group General Manager, Group Public Affairs of the Corporation, Ohi Alegbe, said the management of the corporation had opted for the Direct Sale-Direct Purchase alternative designed to enshrine transparency and eliminate the activities of middlemen in the crude oil exchange for product matrix.

Mr. Alegbe explained that the DSDP option was preferable, as it would allow more efficiency with the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.

The NNPC said it decided to adopt the new strategy after the evaluation of 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 that introduced toll on the value chain.

If the OPA arrangement was allowed to subsist, NNPC said ​it​ would constitute a significant value loss to the country by way of accruals.

Consequently, Mr. Alegbe pointed out that the NNPC management resolved to ensure that only bonafide owners of refineries identified in the ongoing OPA Tender Evaluation process would be engaged under the new arrangement.

“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 NNPC spokesperson explained.

Mr. Olegbe said the call for commercial bids issued to the 44 shortlisted bidders made up of 34 international firms and 10 indigenous companies have been withdrawn.


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