RAINOIL, SAHARA, MASTERS ENERGY, BP, OANDO AMONG WINNERS AS NNPC AWARDS ITS 2019/2020 DSDP CONTRACT

Mallam Mele Kyari, Group Managing Director of NNPC

The Nigerian National Petroleum Corporation (NNPC) is Nigeria's state-owned oil company through which the federal government regulates the entire spectrum of oil and gas business in the country. Even though Nigeria has a maximum crude oil production capacity of 2.5 million bpd which is the largest in Africa and the sixth largest in the world, as of May, 2019, actual production stood at 1.95 million bpd according to a report by The Punch. However, the country has a poor refining capacity, despite having four (4) main refineries, especially for PMS. Hence, every year, the NNPC carries out a tender process to award contracts to companies interested in selling Nigeria's crude oil in the international market and also purchasing and importing refined petroleum products. This is called the direct sale of crude oil and direct purchase of refined petroleum products (DSDP) arrangement.

Today, the NNPC announced winners of the contract award for the period 2019/2020 in a press release by the Corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu in Abuja. The contract period will be from 1st October, 2019 to 30th September, 2020. Below is a list of the successful companies as listed by the NNPC:

1.  BP OIL INTERNATIONAL LTD./AYM SHAFA LTD.

2.  VITOL SA/CALSON-HYSON

3.  TOTSA TOTAL OIL TRADING SA/TOTAL NIG. PLC

4.  GUNVOR INTERNATIONAL B.V./AY MAIKIFI OIL & GAS CO. LTD.

5.  TRAFIGURA PTE LTD./A. A. RANO NIG. LTD

6.  CEPSA S.A.U./OANDO PLC

7.  MOCOH SA/MOCOH NIG. LTD.

8.  LITASCO SA/BRITTANIA-U NIG. LTD./FREEPOINT COMMODITIES

9.  MRS OIL & GAS COMPANY LTD

10. SAHARA ENERGY RESOURCE LTD

11. BONO ENERGY LTD./ETERNA PLC/ARKLEEN OIL & GAS LTD./AMAZON ENERGY

12. MATRIX ENERGY LTD./PETRATLANTIC ENERGY LTD./UTM OFFSHORE LTD./LEVENE ENERGY DEVELOPMENT LTD

13. MERCURIA ENERGY TRADING SA/ BARBEDOS OIL & GAS SERVICES LTD./RAINOIL LTD./PETROGAS ENERGY

14. ASIAN OIL & GAS PTE LTD./ EYRIE ENERGY LTD./ MASTERS ENERGY OIL & GAS LTD/CASIVA LTD

15. DUKE OIL COMPANY INCORPORATED

In total, there are 15 groupings, with 36 companies participating.
According to the press release, “under the DSDP arrangement, the listed fifteen (15) consortia/companies shall over the contract period, offtake crude oil and in return, deliver corresponding petroleum products of equivalent value to NNPC, subject to the terms of the agreement".

In his takeover note on 8th July, 2019, the newly appointed NNPC Group Managing Director, Mallam Mele Kyari, had promised to open NNPC's books to public scrutiny, saying as a publicly owned company, Nigerians deserve to know about the operations of the Corporation.

Basically, these successful companies will be allocated quotas of NNPC's crude by the corporation for them to sell in the international market and also to purchase and return its equivalent in petroleum products to the NNPC over the period of the contract. The corporation announced in May this year that 132 companies submitted bids for the DSDP contract.