Maikanti Baru, GMD, NNPC

The Nigerian National Petroleum Corporation, NNPC, said that 132 (local and international business partners, and potential off-takers and suppliers) companies had bid for the right to swap the nation’s crude oil for fuels as a tender for the deals closed on Thursday.

The tender for the one-year contracts, dubbed direct sale, direct-purchase (DSDP), was issued in March. NNPC extended the 2018 contracts through June of this year.

Group Managing Director of NNPC Dr Maikanti Baru who set the process in motion said the essence of the bidding was to ensure reputable qualified companies were engaged.

Baru explained that the process was to ensure that the selection of off-takers aligned with transparent and accountable procedures in compliance with the Public Procurement and Nigerian Content Acts.

“The third public bid opening ceremony for the DSDP tenders is fully in line. It is in demonstration of President Muhammadu Buhari’s transparency and anti-corruption initiatives which the NNPC has imbibed and championed relentlessly”.

“The DSDP scheme was introduced in 2016 with efficient and cost effective systems and processes to plug the value eroding loopholes of the January 2015 OPC contracts. Since the inception of the DSDP scheme in 2016 until March 2019, about 29.5million metric tons (39.6 billion liters) of petroleum products have been supplied under the scheme representing over 90 per cent of the national requirement”.

The scheme replaced another program that paid subsidies to importers, NNPC managing director Maikanti Baru said and supplied some 90 per cent of its import requirements.

“Through a transparent competitive bidding and evaluation process, the scheme has enlisted a robust supplier mix comprising of the big international players and strong Nigerian downstream companies for supply flexibility and local capacity development,” Baru said.

According to him, the scheme has over the years ensured significant reduction in product demurrage cost in the range of 84 per cent and cost savings of about 2.2 billion dollars.

He assured the bidders that all the bids would be given fair consideration.

Group General Manager, (GGM) Crude Oil Marketing Division, NNPC, Mele Kyari said the bid process was open to all to optimise local participation.

Nigeria has leaned heavily on the swap arrangements to get fuel, particularly gasoline, as other would-be importers struggle to make money due to price caps.

The 132 companies bidded for about 14 billion litres of products under the DSDP scheme.