By Oscarline Onwuemenyi
ABUJA – The Nigerian National Petroleum Corporation has advocated the need for greater efficiency, best practices, transparency and cost-saving procedures in the contracting process within the oil and gas industry.
To this extent, the corporation on Thursday signed a Memorandum of Understanding with about 24 oil and gas majors in the country for the Nigerian Petroleum Exchange (Nipex) project, which is designed to deliver value and enhance local content in the industry.
The Group Managing Director of the NNPC, Dr. Mohammed Sanusi Barkindo, noted during the signing ceremony in Abuja, that the Nipex MoU is a major initiative introduced by the operators to streamline all partiesâ€™ role and responsibilities in achieving Nipex objectives.
He said, â€œThe signing of the Nipex MoU is intended to ensure that the roles and responsibilities of both NNPC and the operators are well articulated and enables Nipex to achieve its set objectives.â€
Barkindo noted that the ceremony â€œis coming at a critical time for the Nigerian oil and gas industry as it prepares for the major transformation that will ensue from the passage of the Petroleum Industry Bill (PIB).
â€œThe expected changes will impact on good governance, fiscal and regulatory issues and operational and coat cost efficiency in the oil and gas industry.â€
He added that the role of Nipex in the transformation would be complimentary as it would be playing a pivotal role in ensuring best practices in the contracting process, developing local capacity and the Nigerian content while assisting the industry to operate at optimal and benchmarkable cost levels.
He explained that Nipex was made up of both the Electronic Marketplace and the Joint Qualifications System both designed to reduce the contract cycle time, improve transparency of contract decision making, improve visibility for each operator and NNPC on contract approval status as well as achieve overall contracting cost reduction for the industry.
According to him, â€œThe benefits of Nipex particularly to the operators cannot be overemphasized. It will deliver contracting process optimization and administrative cost reduction through streamlining the pre-qualification and approval processes using electronic systems.
â€œWe have deployed cutting-edge information technology resources to achieve the foregoing objectives.â€
Barkindo further noted that the online contracting process developed by Nipex has integrated the operations of the operators, suppliers, NAPIMS, Nigerian Content Division and the Department of Petroleum Regulation (DPR) to exploit synergies and drastically reduce contracting cycle by providing an online collaborative environment for all stakeholders.
He added that, â€œThe need for competitive pricing in the industry has become more pertinent than ever before, with the fluctuating pricing fortunes of the industry. Nipex has provided substantial cost savings to operators who have utilized the Reverse Auction functionality.
â€œCurrently, the Nipex system is widely adopted by all stakholders in the oil and gas industry. Supplier registration is ongoing, and oil and gas contracts are being on-boarded steadilyâ€
He pointed out that although the system was new to the Nigerian industry, NNPC was committed to addressing the challenges that would arise towards providing world-class service in the Nigerian oil and gas industry.
In his remarks, the Group Executive Director Exploration and Production of the Corporation and Chairman Steering Committee of NipeX, Engineer Phillip Chukwu applauded the management of NipeX and NAPIMS for introducing the e- contract system adding that this would make it easy for contractors to participate in the tendering process.
The Oil Companies that signed the MoU include; Petrobras, Addax, Agip, Texaco, Conoco-Phillips, Shell, NPDC, CNOOC, KNOC, Total, BG, Statoil, NAOC, Pan-Ocean and Sahara , ExxonMobil, Chevron/Texaco Oil and Conoil among others.