The Nigerian National Petroleum Company Limited (NNPC) has outlined stringent financial requirements for companies interested in operating and maintaining the Warri Refining and Petrochemical Company and the Kaduna Refining and Petrochemical Company.
According to an Expression of Interest (EOI) document released by NNPC on Saturday, only firms with a minimum average annual turnover of $2 billion and a debt-free status will qualify for the bidding process. This financial benchmark is part of NNPC’s efforts to attract financially capable and technically proficient companies that can effectively manage the refineries and ensure a stable supply of petroleum products to meet Nigeria’s energy security needs.
“NNPC is determined to engage reputable and credible Operations & Maintenance companies to operate and maintain the Warri and Kaduna refineries. These companies must have the financial wherewithal to manage these complex facilities, ensuring their reliability and sustainability to meet the nation’s fuel supply and energy security obligations,” the EOI document stated.
Bidders must demonstrate their financial health by providing audited accounts for the past four years (2020-2023) and their latest credit ratings. In addition to financial strength, the NNPC is prioritizing technical expertise, requiring bidders to detail their experience in refinery operations, particularly in areas such as Fluid Catalytic Cracking units, instrumentation and controls, and turnaround maintenance.
“NNPC’s priority is to ensure that the refineries are operated by firms with proven technical competence. The successful bidders must have a track record of managing similar facilities, with experience spanning at least two decades in refinery operations and maintenance,” the document added.
The scope of work for the Operations and Maintenance (O&M) contract includes long-term and short-term production planning, maintenance execution, process and controls engineering, and environmental management. Bidders are also expected to provide detailed information about their management teams and workforce, emphasizing compliance with Nigeria’s local content laws.
“Compliance with the Nigerian Content Act is non-negotiable. Bidders must demonstrate a clear commitment to local content, including the training and development of the Nigerian workforce and engagement with local communities,” NNPC emphasized.
A critical requirement in the EOI is that interested firms must not have any existing loans or financial liabilities, ensuring that selected O&M contractors are not financially over-leveraged and can focus on the successful operation of the refineries.
“A firm with outstanding financial liabilities may face challenges in raising the necessary capital to fund the operations of the refineries, which could jeopardize the entire project,” the document noted.
NNPC has assured potential bidders that crude supply to the refineries will be guaranteed after the takeover by private firms, although this arrangement will be temporary. According to NNPC spokesperson Olufemi Soneye, the O&M contract is designed to last a maximum of five years.
“NNPC is committed to ensuring that the refineries have a steady supply of crude oil, which is critical to their operations. However, the private firms that will take over the operations will do so on a temporary basis, for a period of up to five years,” Soneye disclosed.
The deadline for submitting Expressions of Interest is September 12, 2024. The tender process will be conducted in three stages—Expression of Interest, Technical, and Commercial—to ensure that the most qualified and capable firms are selected to operate the refineries.
