NNPC Begins Search for Private Firms to Operate, Maintain Warri, Kaduna Refineries

* Sets $2bn minimum average annual turnover for interested bidders

Emmanuel Addeh in Abuja

The Nigerian National Petroleum Company Limited (NNPC) yesterday, said it was seeking Operations and Maintenance (O&M) companies to bid for the Warri and Kaduna refineries.
In a public notice on its official X handle, the national oil company which outlined the qualifications of companies interested in bidding for the contracts, stated that the move will help ensure reliability and energy security for the country.
In August 2021, the Federal Executive Council (FEC) approved the awards of contracts for the rehabilitation of Warri and Kaduna refineries for $1.48 billion.
The installed capacities of the Warri and Kaduna refineries, operated by NNPC, are 125,000 bpd and 110,000 bpd. At the time, the project was expected to be completed in three phases of 21, 23, and 33 months.

Nigeria, for years, has stopped producing crude oil products after all its government-owned refineries packed up.  Earlier in April 2021, the NNPC signed a $1.5 billion contract with the Italian company Maire Tecnimont to rehabilitate the Port Harcourt refinery.
 The contract was aimed at restoring the complex to a minimum of 90 percent of its nameplate capacity. The project was initially meant to be completed in three phases of 18, 24, and 44 months. Not a drop of petrol has been produced from any of the facilities.
In the extant case, the NNPC said it would be a single tender through a three-stage tender process namely: Expression of Interest (EOI), Technical, and Commercial.

The contract scope, the NNPC said in the public notice would cover long-term and short-term production and operations planning, production, and operations execution.
It would also extend to monitoring, reporting, and optimisation of operation, maintenance planning (short-term), maintenance execution, and reliability as well as inspection.

According to the national oil company, it also includes process and controls engineering, quality control, quality assurance and laboratory, specialist engineering, health and safety, and environmental management.
The winning firms will also be involved in turnaround maintenance planning and execution, minor projects, non-contractor management, subcontractor management, inventory, and warehouse management.
As part of the requirements for qualification, the NNPC stated that applicants must present audited accounts for the past four years, that is 2020 to 2023, including balance sheet as well as income and cash flow statements.

Bidders are also expected to provide evidence of their company’s latest credit ratings and the name of the rating agency and demonstrate a minimum average annual turnover of at least $2 billion for the financial years ending 2020, 2021, 2022, and 2023 respectively.
According to the NNPC, documents by interested persons should be submitted online through the electronic NIPEX tender portal latest noon on October 10.
“NNPC Ltd is seeking to engage reputable and credible O&M companies to operate and maintain two of its refineries, Warri Refining and Petrochemical Company (WRPC) and Kaduna Refining and Petrochemical Company (KRPC), to ensure reliability and sustainability to meet the nation’s fuel supply and energy security obligations,” the notice added.

The oil company further stressed that bidders must swear to an affidavit disclosing whether or not they are officers of any of the relevant committees of the NNPC, directors, shareholders, or have any pecuniary interest in the bidder.
It also requested a written statement confirming that interested companies do not have any director who has been convicted in any country for a criminal offense relating to fraud or any financial impropriety or criminal misrepresentation or falsification of facts relating to any matter.
Among others, it called for a written statement confirming that the firm does not have any existing loan or financial liability with a bank or other financial institution.

NNPC stated that it will not enter any form of communication with interested bidder(s) from the commencement date of the advertisement.
Aside the Port Harcourt, Warri and Kaduna refineries which have missed their deadlines, the Dangote refinery has recently promised to begin refining of petrol in September to raise the country’s total refining capacity to over 1 million bpd.
The facilities are expected to make products available for the entire nation and the West African continent in the first instance.