The Nigerian National Petroleum Corporation, NNPC has opened bids for the 2015/2016 award of contract to companies for the evacuation of Nigeria’s crude oil equity from the various crude and condensate production platforms.
The Corporation has however extended invitation to Forte Oil, Mobil and other companies affected in the cancellation of the deal announced earlier in the week.
The NNPC in a statement by the Group General Manager, Public affairs, Mr. Ohi Alegbe, stated that as a part of the measures to optimise the marketing of Nigeria’s crude oil and secure new market potentials, the number of
off-takers for the proposed 2015/2016 term contract which would emerge after its planned rigorous competitive bid exercise has been pruned from 43 to 16.
He explained that the move was to instill transparency and probity in the award of the annual Crude Oil Term Contract.
“In the days ahead we shall place advertisement for the 2015/2016 Term Contracts and the publication will run for one month in major National and International print media to ensure effective message penetration. Later the guidelines for the selection of new off-takers would be published and subsequently a special bid evaluation committee would be constituted to conduct due diligence on successful applicants”, the Corporation explained.
The NNPC also clarified that apart from the earlier listed industry operators whose performance trajectory impressed its management to invite them to bid for the proposed Offshore Processing Agreements, OPA, the Corporation is extending the invitation for competitive bidding to Forte Oil and Mobil, among others.
“We are throwing the tender process open for competitive bidding by strong industry players with track records of integrity and financial strength to execute the project,’’ the NNPC stated.
Exchange rate fluctuation may raise cost of 2nd Niger Bridge
From Isaac Anumihe, Abuja
The National Sovereign Investment Authority (NSIA) has raised the alarm over recently exchange rate fluctuations in the economy, warning that it may likely affect the initial N117.9 billion budgeted for the second Niger Bridge.
The warning was contained in a statement issued by NSIA in Abuja, which disclosed that the project was initially estimated to cost N108 billion excluding duties and VAT, which if included would raise the project cost to N117.9 billion.
This, it said, was equivalent to $700 million at the then prevailing exchange rate of N154/$.
“The final project cost would naturally be affected by exchange rate fluctuations and other variables. The Federal Government of Nigeria (FGN) made a N30 billion commitment to the project. The consortium would raise the remaining funds for the project from Nigerian and international lenders and equity providers” it said.
So far, the Federal Government has released N18.3 billion of which N10.4 billion has been disbursed on early construction works.
But to date, NSIA has spent about $2.21million on consultancy services on the two phases of the project – $247,586 on the due diligence phase; and $1.96million on the project development phase.
These services, the statement, said, have included work in the areas of legal, financial, technical and engineering, environmental and social impact advisory, provided by various credible and well-recognised Nigerian and international professional services firms.
“ Total consultancy services cost so far is less than one per cent of the estimated project cost. Whilst there is no standardised benchmark for transaction costs, the European Investment Bank’s Economic and Financial Report No. 3 of 2005, indicates that, on the average, the level of transaction cost for the procurement phase of PPP projects is over 10 per cent of the capital value of the relevant project in Ireland, the Netherlands, Portugal, and the United Kingdom.
This EIB survey estimate does not include costs related to contract monitoring and renegotiation in the operational phase of the relevant projects. NSIA’s technical consultants on this project have been instrumental in value engineering and reducing the initial project cost to the current level, the statement said.
NSIA maintained that, it has put in place a multi-stage approval process for all disbursements, under which all payments involving construction are made after approval by a third party engineering firm which matches work completed against amounts due.
Indeed,the agency said it has had promising engagement with potential lenders, which include many international investors.
‘’NSIA is rated by the US-based Sovereign Wealth Fund Institute as one of the most transparent sovereign wealth funds in the world. NSIA continues to uphold and abide by the highest standards of corporate governance, accountability and integrity,while its accounts are audited by PricewaterhouseCoopers (PwC) and made publicly available within the first 90 days of the new calendar year.” the statement, said.
Recall that the Second Niger Bridge and adjacent roads will be 11.9km in length. The project is structured as a Public Private Partnership (PPP) and will be constructed and operated on a Design, Build, Finance, Operate and Transfer (DBFOT) basis.
It is expected that the bridge would be constructed and delivered in 48 months. When completed, the bridge and adjacent roads will have six lanes with three in each direction.
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