NNPC group invites tenders for 2021 – 2022 Direct Sale of Crude Oil & Direct Purchase of Petroleum Products (DSDP)
Nigerian National Petroleum Corporation (NNPC) is empowered pursuant by the NNPC Act (LFN Cap. 320) to engage in all commercial activities
relating to Petroleum Operations. In compliance with the Public Procurement Act 2007 and NNPC’s Policy and Procedures, NNPC intends
to engage qualified and credible companies in a Direct Sale of Crude Oil and Direct Purchase of Petroleum Product (DSDP) to ensure sustained
product supply in the country.
Brief Description of DSDP Scope:
NNPC shall deliver monthly crude oil lifting on Free on Board (FOB) basis to supplier who shall in return, deliver petroleum products of Nigerian standard specification to NNPC on Delivered at Place (DAP) basis, at designated safe port (s) in Nigeria. The petroleum products to be delivered shall be equivalent in value to the Crude Oil received from NNPC subject to the general terms and conditions as would be advised to successful companies subsequently via Term Sheet (TS).
Beneficiaries to pay attention to the Nigerian Oil and Gas Industry Content Development Act
It is hoped that the increased cash flow will give the companies involved the needed leverage to be able to weather the storm of post covid-19 economic complications.
What is local content?
The Nigerian Oil and Gas Development Law 2010 defines local content as “the quantum of composite value added to or created in Nigeria through utilization of Nigerian resources and services in the petroleum industry resulting in the development of indigenous capability without compromising quality, health, safety and environmental standards”.
What is a Nigerian Company?
A Nigerian Company is defined under Nigerian Oil and Gas Industry Content Development Act (the Act) as a company registered under the Companies and Allied Matters Act and having not less than 51% Nigerian shareholding. Such a company is to be given first consideration in the award of Oil Blocks, Oil Field licences, and Oil lifting licences and in all project awards in the Nigerian Oil and Gas industry.
‘First consideration’ was not defined in the Act
The Act did not spell out the guidelines for the Nigerian Content Development and Monitoring Board (The Board) to determine the veracity of the criteria employed by the operator in determining first considerations within the provisions of the Law.
Local Content Does Not Affect Changing World Energy Demand Supply Paradigm
It seems that the landscape of global oil supply demand and trade is rapidly changing as a result of the increase in oil supply from United States of America Shale areas, emergence of shale gas, oil supply from other African countries and the decline in European and North American oil demand. Nigeria’s oil export to United States of America has declined, as a matter of fact, Nigeria seems to have an energy import-export balance with the United States of America.
Please get in touch with @megathoslaw for guidance on how to participate in the NNPC DSDP Crude Oil bid round.