“We have cancelled contracts for Sahara, Aiteo, Duke Oil and Ocean marine” NNPC seems to be saying, Chineme Okafor of AllAfrica reports that the Nigerian National Petroleum Corporation (NNPC) wednesday confirmed the cancellation of the Offshore Processing Agreements (OPAs) between the corporation and Sahara Energy Resources (Nig.) Ltd. founded by the trio of Mr. Tope Sonubi, Mr. Tonye Cole and Mr. Ade Odunsi; Aiteo Energy Resources Limited founded by Mr. Benedict Peters; and Duke Oil Company Inc., a subsidiary of NNPC.
It also announced the cancellation of the contract for the delivery of crude oil to the Port Harcourt, Warri and Kaduna refineries awarded to Ocean Marine Tankers (OMT) Limited, a company founded by the Skye Bank Chairman, Mr. Tunde Ayeni, Edo State business mogul, Capt. Hosa Okunbor, and others.
NNPC explained in a statement signed by its spokesman Ohi Alegbe that the decision to cancel the crude delivery contract with Ocean Marine to the refineries was aimed at reducing cost and strengthening operational efficiency across the corporation’s value chain.
The NNPC stated that after proper evaluation and in line with the terms of the contract for the delivery of crude oil to the nation’s refineries in Warri, Port Harcourt and Kaduna, the corporation has cancelled the current contract due to its exorbitant cost and inappropriate process of engagement.
The corporation noted that as a stop-gap measure, NIDAS Marine Limited, a subsidiary of the NNPC has been engaged to provide crude delivery service on negotiated industry standard rate pending the establishment of a substantive contract.
“We have also commenced a rigorous and transparent process of securing capable and competitive contractors for the delivery of crude oil by marine vessels to Port Harcourt and Warri/Kaduna refineries, pending the restoration of the crude pipeline infrastructure,” the corporation stated.
The NNPC explained that it resorted to the delivery of crude oil to the refineries by marine vessels following incessant attacks on the Bonny-Port Harcourt refinery pipeline and the Escravos crude pipelines by vandals and oil thieves resulting in the complete unavailability of the pipelines in 2013.
NNPC renewed its contract with OMT Limited last year for the delivery of crude to its refineries.
In addition to operating a very large crude carrier (VLCC) with the capacity to convey two million barrels of crude oil, the company owns two transshipment vessels – MT Abiola and MT Igbinosa – named after the wives of the founders, which transships the crude oil from the VLCC to the depots at the Warri and Port Harcourt refineries. Ironically, crude oil is then piped through the Escravos pipeline (System 2) to the Kaduna refinery.
Early this year, the contract was disrupted when NNPC engaged traders for the OPAs. The contract was restarted in July when the refineries resumed production.