NNPC REQUIREMENT FOR NIGERIA CRUDE OIL PURCHASE

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NNPC REQUIREMENT FOR NIGERIA CRUDE OIL PURCHASE

 

Introduction

The Nigerian National Petroleum Corporation (NNPC) is an OPEC registered nation and it abides by its rules and regulations. Where a company has the interest to purchase crude oil in Nigeria, such company may approach NNPC for such transaction.

The NNPC has been empowered pursuant to the NNPC Act (LFN CAP 320) to engage in all commercial activities relating to petroleum operations. In compliance with the Public Procurement Act 2007, NNPC to engage qualified and reputable companies for the sale, purchase and lifting of Nigerian crude oil grades.

Those qualified to apply to the NNPC for Crude Oil Purchase include the following:

  • A bonafide end user who owns a refinery or retail outlet that can process Nigerian crude oil grades.
  • Government to government arrangement.
  • An established globally recognised large volume of crude oil trader.
  • An indigenous Nigerian company engaged in the Nigerian oil and gas downstream business activities.

The duration of the term contract for the purchase shall be for 12 calendar months (1 year)

Requirements for the purchase of crude oil pursuant to the NNPC Act

  • Certificate of incorporation, which is the evidence of company registration issued by the corporate affairs commission (CAC) for Nigerian companies, and for foreign companies’ certificate of incorporation issued by the home country government agency.
  • Certified true copies of the memorandum and article of association of the company, stating the statement of share capital and the return of allotment, CAC7 Particulars of Directors, and other statutory documents indicating ownership structure of the company.
  • Detailed company profile demonstrating the company’s capability.
  • A tender application letter on the bidder’s letterhead paper including the name of the authorised contact person, company full address, email address and telephone number should be submitted.
  • Tax clearance certificate of the company for the last 3 years for Nigeria company and similar tax certification document for foreign companies.
  • Evidence of compliance with the provision of the Industrial Training Fund (ITF) Amendment Act 2011, including the copy of the compliance certificate from ITF or similar documents for the foreign company.
  • Evidence of compliance with the Nigerian social insurance trust fund (NSITF) Act; the inclusion of the compliance certificate for Nigerian companies.
  • Evidence of compliance with the Pension Reform Act 2014, including valid pension clearance certificate for Nigerian companies or similar documents for foreign companies.
  • Evidence of relevant certification with the department of petroleum resources (DPR) where applicable.
  • Audited account of the company for the past 3 years of application, which must bear the stamp of an audit firm.
  • Demonstration of minimum annual turnover of USD500, 000,000 (or the naira equivalent) and net worth of not less than USD250, 000,000 or the naira equivalent for the recent fiscal year ending.
  • Ability to establish an irrevocable letter of credit for the payment of any allocated crude oil subject to the contract terms.
  • Details of the applicants’ facilities, market and volume of crude oil listed in barrels and the products traded listed in metre tonnes.
  • Evidence of verifiable similar service carried out within the past 5 years.
  • A prospective bidder shall also make a sworn affidavit to support his application action as follows:
  1. To allow NNPC to verify all claims made in the application
  2. To allow NNPC to verify that the organisation is not in any form of insolvency, bankruptcy or receivership
  3. To confirm that the company is not a replacement for a hitherto tax defaulting company
  4. To confirm whether or not any of the members of relevant companies of NNPC or Bureau of public procurement has an interest in the company
  5. A written statement confirming that the company does not have any director who has been convicted in any country for a criminal offence, fraud etc
  6. A written statement providing full names, phone number, contact addresses of current directors and beneficial owners.
  • A pres-signed undertaking to comply strictly with the Nigerian Anti-corruption laws in processing the bid and executing the contract when the application is granted.
  • After that, all the completed bids should be sealed and submitted in 2 envelopes clearly marked as one original copy and one electronic copy duly signed by the bidders authorised representative as (INVITATION TO TENDER FOR THE SALE AND PURCHASE OF CRUDE OIL)
  • All bids shall then be publicly opened and endorsed following the deadline for submission in the presence of invited observers and prospective bidders.

Conclusion

For any local or foreign company looking to purchase crude oil in Nigeria, it must bid its interest with the Nigerian National Petroleum Corporation. Only companies that submitted the required information as listed above and meet the qualification criteria will be contacted by NNPC for evaluation. And NNPC deals directly with the authorized officers of the interested company and not through individuals or its agents.

 

Written by the Oil & Gas Law Department at Resolution Law Firm, Nigeria

 

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