A Review of the Nigerian Energy Industry

NNPC drops OPA, adopts direct purchase of petroleum

*NNPC Towers
*NNPC Towers

*Opts for direct sale of crude oil

04 November 2015, Sweetcrude, Abuja – In a major shift designed to enshrine transparency and eliminate the activities of middlemen in the crude oil exchange for product matrix, the Management of the Nigerian National Petroleum Corporation, NNPC on Tuesday announced the replacement of the Offshore Processing Arrangement, OPA option in preference for the more efficient Direct Sale-Direct Purchase (DSDP) alternative which allows for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international Refineries.

The NNPC explained that it came to this informed position after the evaluation exercise 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 which introduces toll on the value chain.

The Corporation stated that if allowed to subsist, the development would in turn constitute a significant value loss to the Federation by way of accruals.

“In this regard, only bona fide owners of refineries identified in the ongoing OPA Tender Evaluation process will be further engaged. 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 Corporation stated.

The NNPC noted that the call for commercial bids issued to the 44 shortlisted bidders made up of 34 international firms and 10 indigenous companies have since been withdrawn.

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