NNPC Crude Oil Swap Contract 2019 Guidelines Released
The NNPC Crude Oil swap contract guidelines known as the Direct Sale and Direct Purchase (DSDP) scheme has been unveiled by the Nigerian National Petroleum Corporation (NNPC). NNPC in a tweet message on its official twitter handle @NNPCgroup, disclosed that it will engage qualified refineries, oil traders, as well as local downstream operators in the 2019 DSDP programme. Nigerian National Petroleum Corporation (NNPC) did not state the volume of crude oil it would put into the DSDP programme but usually allocates 445,000 barrels of oil a day from Nigeria’s daily production figures to take care of the country’s daily products consumption.
This volume is also often used by it in its crude oil for product swap programmes, including the DSDP. According to the NNPC, the invitation of participants in the swap contract was in line with Nigeria’s public contract and procurement law the Public Procurement Act 2007, as well as its policy and procedures on same. The corporation said the decision to engage qualified and credible companies in the DSDP programme was to ensure sustained product supply in the country.
Nigerian National Petroleum Corporation (NNPC) added that the programme would deliver monthly crude oil lifting on Free on Board (FOB) basis to suppliers who shall in return deliver petroleum products of Nigerian standard specification to it on Delivered at Place (DAP) basis, at designated safe ports in Nigeria. NNPC equally stated that the petroleum products to be delivered shall be equivalent in value to the crude oil received from it by the suppliers.
The company that will be eligible to participate in the NNPC Crude Oil Swap Contract Guidelines as been described by NNPC as
“An established international end user who owns a refinery with the capacity to process Nigerian crude oil grades and has a Nigerian affiliate or subsidiary experienced in downstream oil and gas business or in partnership with an experienced Nigerian company engaged in downstream oil and gas business particularly petroleum products trading.
“An established and globally recognised large volume petroleum product trading company and has a Nigerian affiliate or subsidiary experienced in downstream oil and gas business or in partnership with an experienced Nigerian company engaged in downstream oil and gas business particularly petroleum products trading.” NNPC also added that: “An Indigenous company engaged in Nigerian oil and gas downstream activities within th trading of petroleum product expertise,” would be allowed to participate.
According to thisdaylive.com, The duration of the NNPC Crude Oil swap contract guidelines, it said, would be for a 12 calendar month, that is, between 2019 and 2020. NNPC said participating companies must provide legal evidence of their existence; tax clearance; compliance with Nigeria’s pension law; the country’s social insurance law; as well as registration on the Bureau of Public Procurement (BPP’s) National Data Base of Federal Contractors, Consultants and Service Providers (NDCCSPs).
With regards to financial requirements, it said: “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 whichever is the current financial year. NNPC added that foreign companies applying shall be required to demonstrate evidence of partnership with experienced Nigerian downstream company that meets a minimum turnover of $65 million and net worth of $32.5 million, while indigenous companies shall meet the minimum turnover of $400 million and net worth of $200 million.