New guidelines for oil firms

Firms bidding to new oil contracts in Nigeria must be major global players in the business and willing to invest in the country, the Nigerian National Petroleum Corporation (NNPC) has said. Under new NNPC guidelines released on Monday, firms bidding for new contracts must maintain a minimum annual turnover of US $100 million, according to news reports citing the state company. Firms must also have a net worth of at least US $40 million. Further, bidders must be crude-oil end-users, own their refineries and outlets abroad, be established and globally recognised large- volume traders, and have built an export oil refinery in Nigeria. Competing firms are also required to invest in community development projects in the oil-producing areas, which have been protesting violently against the underdevelopment of their impoverished communities. Each bidder will post a million-dollar bond, through a reputable Nigerian bank, which will be cashed if investment is not made within six months of signing of a contract. These conditions eliminate from the competition many small operators which, AFP said, used to have contracts and close links to the military.