Determined to ensure steady supply of petroleum products, the Nigerian National Petroleum Corporation(NNPC), last week named Duke Oil, Carlson and Napoil as the three new companies to engage in Offshore Processing Agreement (OPA).
The corporation, however, said that the deal would be a stop-gap arrangement which is designed to run for three months and obliges the corporation to allocate a certain volume of crude oil within the period for refining at offshore locations in exchange for petroleum products at pre-agreed yield pattern.
Under the OPA agreement, NNPC allocates a total of 210, 000 barrels of crude oil per day for refining at offshore locations in exchange for petroleum products at pre-agreed yield pattern.
A statement from the Group General Manager, Group Public Affairs, NNPC, Mr. Ohi Alegbe, explained that the temporary OPA package would lapse with the advent of the fresh OPA contracts envisaged to come into effect at the end of the ongoing public tender of the process.
It noted that the OPA arrangement would help augment in-country production of refined petroleum products from the nation’s refineries to meet local demand.
Recall that the corporation had three weeks ago, announced the termination of OPA entered into in January, 2015, with three companies- Duke Oil Company Inc., Aiteo Energy Resources Limited and Sahara Energy Resources Nigeria Limited.
“However after detailed appraisal of the operation and its terms of agreement, the NNPC is convinced that the current OPA is skewed in favour of the companies such that the value of product delivered is significantly lower than the equivalent crude oil allocated for the programme,’’ the corporation had said.
NNPC also explained that the structure of the agreement does not guarantee unimpeded supply of petroleum products as delivery terms were not optimal.
To address these lapses, the NNPC informed that it has commenced the process of establishing alternative OPA based on optimum yield pattern with tender processing fees.