The Nigerian National Petroleum Corporation (NNPC) has picked 26 foreign and local companies as well as 12 countries to lift the country’s crude oil for the next two years.
The crude term contracts, expected to run from 2021 through 2023, would see the firms and the selected nations, which would operate on a Government-to-Government (G2G) basis to purchase the commodity from the national oil company.
The deal is coming less than a week after the corporation chose 16 oil and gas consortia for its new crude-for-fuel swap contracts for one year starting in August.
The contracts, known as Direct Sale, Direct Purchase (DSDP) are high-stakes agreements used to supply nearly all of Nigeria’s petrol needs as well as cover some of its diesel and jet fuel consumption.
However, in the fresh crude oil term agreements, it was observed that the names of majority of the companies involved in the DSDP deal also appeared in the list of those picked by the national oil company for the crude term contracts.
The list sighted by THISDAY showed that the preferred companies included Sahara Energy Resources Limited, Oando, Duke oil (an NNPC subsidiary), Petrogas, AA Rano, MRS, Mercuria and Vitol.
Other oil and gas concerns which scaled the NNPC selection hurdle were Oceanbed Trading Limited, Levene Energy, Bono Energy , Mocoh Energy, BP Oil, West Africa Gas Limited, Litasco SA, Emadeb, Hyde, Matrix and Brittania-U.
Other names listed by the NNPC as having qualified for the contracts included Masters, AMG, Casiva, Barbedos, Trafigura, Hindustan and Patermina.
NNPC has its own equity share of crude oil from its Joint Ventures (JVs), usually shared on a 60 to 40 basis and thereafter appoints companies and issues licences to lift its share of the oil on a Free on Board (FOB) basis.
The companies and countries nominate ships that transport the crude which is sold in the international market. Sometimes, the NNPC also awards contracts to governments to carry out the business.
In the document approving the qualified countries, China, Niger, Cote D’voire, Ghana, India, Togo, South Africa came tops, while Sierra Leone, Liberia, Turkey, Senegal, and Fujaira also made the cut.
Typically, entities qualified to take part in the contract bid are divided into four categories, namely a bonafide end user who owns a refinery and or retail outlets that can process Nigerian crude oil grades.
For the government to government contracts, or what is termed “bilateral relationships”, with what the corporation terms “high energy consuming nations”, bidding nations must provide proof that the entity is wholly owned by the relevant country or provide evidence of a bilateral agreement with the designated nation.
The third category is the internationally established and globally recognised large volume crude oil traders, while the fourth classification are indigenous companies engaged in Nigeria oil and gas downstream business activities.
In addition, qualifying foreign companies must demonstrate a minimum annual turnover of $500 million or the naira equivalent and a net worth of not less than $250 million or the naira equivalent for the previous financial year.
For indigenous firms, they are required to have a minimum turnover of $200 million or the naira equivalent and a net worth of $100 million for the preceding financial year ending.
Bidders are also to show their ability to handle supplies of crude and must list facilities and products processed or sold over the last three years, in addition to disclosing links to NNPC or the Bureau of Public Procurement (BPE) and confirming that directors have not been convicted of fraud or financial impropriety.
As with all Nigerian tenders, NNPC also highlights that the local content law must be strictly adhered to in terms of, among others, the use of Nigerian shipping companies, insurance and banks where possible.
In the past, Civil Society Organisations (CSOs) in the country’s oil and gas space had argued that G2G contracts with smaller, non-refining countries have high governance risks and low policy benefits for Nigeria.
For instance the Nigeria Natural Resource Charter (NNRC) has asked that term contracts should be carried out through a transparent and competitive tender process that includes robust pre-qualification standards and an end of sales to smaller non-refining countries unless NNPC can publicly explain the deals’ policy benefits.
UAE makes U-turn, reinstates ban on Nigerian flights
Less that 48 hours after announcing resumption of flights to Nigeria, Emirates, the UAE flag carrier, has again announced indefinite suspension of flights to Nigeria.
The UAE authorities had initially fixed Wednesday, June 23, 2021, for resumption of flights to Nigeria.
But in a statement on its website on Monday, the airline said, “In line with government directives, passenger flights to and from Nigeria (Lagos and Abuja) are suspended with effect from 21 June 2021 until further notice.”
The airline had on Saturday announced resumption of flights, which were suspended in March over diplomatic row on COVID-19 protocols.
The Dubai’s Supreme Committee of Crisis and Disaster Management had lifted the ban on Nigeria and also removed the rapid antigen test and said passengers from Nigeria would only be required to possess negative PCR test.
“We look forward to facilitating travel from these countries and supporting various travelers’ categories.
“We will resume carrying passengers from South Africa, Nigeria and India in accordance with these protocols from 23rd June,” Emirates had announced.
But it made U-turn on Monday with a new travel update indicating that Lagos and Abuja flights would no longer resume on Wednesday as earlier announced.
Emirates said, “Customers travelling to and from Lagos and Abuja will not be accepted for travel. Customers who have been to or connected through Nigeria in the last 14 days are not permitted to board from any other point to the UAE.
“We regret the inconvenience caused, and affected customers should contact their booking agent or Emirates call centre for rebooking. Emirates remains committed to Nigeria, and we look forward to resuming passenger services when conditions allow.”
CAC boss denies N6.54bn fraud allegation
The Corporate Affairs Commission (CAC) has denied claims of alleged N6.542 billion fraud and other allegations by the Nigeria Labour Congress (NLC).
The Registrar General/Chief Executive, Corporate Affairs Commission (CAC), Alhaji Garba Abubakar, has expressed the commission’s commitment to the anti-corruption war of the President Muhammadu Buhari’s administration, adding that it will not in any way be party to corrupt practices.
He said the CAC would continue to work hard to achieve the objectives for which it was established to the satisfaction of its customers and stakeholders.
Abubakar spoke against the backdrop of alleged abuse of power and financial impropriety among others leveled against the management by the CAC staff union under the aegis of the Amalgamated Union of Public Corporation , Civil Service Technical and Recreational Services Employees (AUPCTRE).
He vowed that the commission would not be distracted by mischief makers bent on running down the organisation.
The commission in a statement said contrary to the claims by the union, the registrar-general had declared his assets before the Code of Conduct Bureau (CCB) in accordance with provisions of the laws of the land, pointing out that it was laughable that the claimants were raising doubt over the content of asset declaration they are not privy to. “It behooves on them to establish any case of wrong declaration,” it stated.
On the alleged inflation of consultancy fees for tax reconciliation, the commission in a statement issued over the weekend by the Director of Public Affairs, CAC, Duke Ukaga, said the tax consultant was engaged long before the appointment of Abubakar, adding that the former’s fees was based on the percentage of savings made to the commission as contained in his engagement letter.
The commission said the consultant was able to renegotiate the commission’s tax liability, saving about N600 million in the process.
The commission, among other things, denied accusations of abuse of power, financial impropriety and commercialisation of promotion examination in the commission.
According to it, “The 2019 examination was held on October 10, 2020, at JAMB CBT Centres in Abuja, Kano and Lagos. A total of 394 staff members sat for the 2019 promotion examination.
“The result of the examination was published the same day at the commission’s website upon receipt from JAMB.
“At the end of the final collation, a total of 258 candidates were successful and promotion letters were issued to the staff upon approval by the board of the commission. It is highly mischievous for anybody to claim that the process was commercialised.”
The management further clarified that the allegations are “figment of imagination of the AUPCTRE who could still not accept the reality of losing checkup dues of over N2 million monthly from the commission following the stoppage of checkup dues deduction in respect of senior staff.”
Nigeria’s economy recovering from COVID-19 impact – IMF
International Monetary Fund (IMF) has announced that Nigeria’s economy is gradually recovering from the negative impact of COVID-19.
This is as it cautioned the federal government to keep reliance on CBN overdrafts for deficit financing within legal limits.
The Fund also urged the government continue to make efforts to strengthen budget planning and public finance management practices to allow for flexible financing
The IMF, in a statement at the end of its virtual meetings with the Nigerian authorities to discuss recent economic, financial developments and outlook, described the recent removal of the official exchange rate from the Central Bank of Nigeria (CBN) website as “encouraging”.
IMF mission, however, noted that both unemployment and inflation rates remain elevated.
The mission said following the sharp output contractions in the second and third quarters, gross domestic product (GDP) turned positive in Q4 2020 and growth reached 0.5 per cent year-on-year in Q1 2021 — supported by agriculture and services sectors.
“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 per cent, owing to high food price inflation,” the statement reads.
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