The Nigerian National Petroleum Company Limited (NNPC) has outlined stringent financial and technical criteria for companies interested in operating and maintaining the Warri Refining and Petrochemical Company (WRPC) and Kaduna Refining and Petrochemical Company (KRPC). According to the Expression of Interest (EOI) document released on Saturday, only firms with a minimum average annual turnover of $2 billion will qualify to bid, and they must also be debt-free.
NNPC’s criteria emphasize the need for potential bidders to have robust financial health, demonstrated by providing audited financial statements for the past four years (2020-2023) and up-to-date credit ratings. The national oil company stressed that successful bidders must not only have the financial strength but also possess the technical expertise required to manage these complex facilities efficiently. The objective is to secure a reliable supply of petroleum products to ensure Nigeria’s energy security.
“NNPC is determined to engage reputable and credible Operations & Maintenance companies to operate and maintain the Warri and Kaduna refineries,” the EOI document stated. “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.”
Technical Expertise and Experience Required
The EOI document outlines that interested firms must demonstrate extensive experience in refinery operations, particularly in managing Fluid Catalytic Cracking units, instrumentation and controls, and turnaround maintenance. The NNPC requires that successful bidders have a proven track record of managing similar facilities, with at least two decades of experience in refinery operations and maintenance.
The scope of work for the contract will cover various operational aspects, including long-term and short-term production planning, maintenance execution, process and controls engineering, and environmental management. Companies are expected to provide detailed accounts of their management team’s capabilities and workforce size, focusing on refining and other energy-related industries.
Commitment to Local Content
The NNPC is committed to adhering to Nigeria’s local content laws and has mandated that bidders must have a significant portion of their management and workforce be Nigerian nationals. Compliance with the Nigerian Content Act is non-negotiable, with bidders required to demonstrate their commitment to training and developing the Nigerian workforce and engaging with local communities.
“Bidders must demonstrate a clear commitment to local content, including the training and development of the Nigerian workforce and engagement with local communities,” the EOI document stated.
Debt-Free Status and Financial Integrity
Another critical requirement is that interested firms must not have any existing loans or financial liabilities with banks or other financial institutions. This measure is to ensure that the selected Operations & Maintenance (O&M) contractors are not financially over-leveraged, which could jeopardize the successful operation of the refineries.
Temporary Takeover and Supply Assurance
NNPC spokesperson Olufemi Soneye confirmed that the selected private firms would operate the refineries on a temporary basis, with the O&M contracts lasting up to five years. Soneye also assured potential bidders that crude supply to the refineries would be guaranteed after the takeover by private firms, emphasizing the company’s commitment to ensuring the steady operation of these facilities.
Bidding Timeline and Process
Interested firms must submit their Expressions of Interest by September 12, 2024. The bidding process will be conducted in three stages: Expression of Interest, Technical, and Commercial. This structured approach aims to ensure that only the most qualified and capable firms are selected to manage the Warri and Kaduna refineries.
Background on Warri and Kaduna Refineries
The WRPC, established in 1978 and operational since 1979, has been a cornerstone of Nigeria’s petrochemical industry, processing 100,000 barrels of crude oil per day. Similarly, the KRPC, operational since 1983, plays a vital role in processing crude oil into essential products for the Nigerian economy. Both refineries have faced operational challenges, including frequent breakdowns, inadequate maintenance, and infrastructure issues, highlighting the need for capable and reliable management.
By setting high standards for the firms vying to operate these refineries, the NNPC aims to revitalize Nigeria’s refining capacity and reduce the nation’s dependence on imported petroleum products.
