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EPSE to award fuel supply contract to PetroChina

The Ethiopian Petroleum Supply Enterprise (ESPE) will award the petroleum supply contract of 2019 to PetroChina next week.  

CEO of ESPE Tadesse Hailemariam told The Reporter that the enterprise will sign the fuel supply contract with PetroChina next week. “We have dispatched letters announcing the results of the bid to the bidding companies this week. The companies can lodge their complaints in the next five days if they have any remark on the bidding process,” Tadesse said. “If there is no complaints then we will sign the contract next week,” he added.      

Three international oil trading firms- TRAFIGURA PTE LTD, Vitol Oil and PetroChina-were participating in the bid floated by EPSE last September inviting international oil trading firms for the supply of fuel to be delivered as of January 2019. The enterprise wants to procure 1.35 million metric tons of gasoil, 240,000 metric tons of jet fuel and 350,000 metric tons of gasoline. The enterprise requested international oil trading firms to submit their technical and financial offers.

Thirty six companies bought the bid document but only three oil firms- TRAFIGURA PTE LTD, Vitol Oil and PetroChina-submitted their technical and financial proposals. The technical proposals were opened on November 8, 2018. All the three companies passed the technical evaluation.

The bid committee opened the financial proposals on November 21. The committee disclosed that PetroChina was the least bidder. PetroChina is not a new entrant to the Ethiopian market. The company won the bid put by EPSE in September 2016 and supplied fuel in 2017.

EPSE estimates that the country would need 2,780,000 metric tons of gasoil, 840,000 metric tons of jet fuel, 494,000 metric tons of gasoline and 83,000 metric tons of fuel oil in 2019. The country’s total annual fuel demand in 2019 is estimated at 4,197,000 metric tons valued at 2.8 billion dollars.

Based on the agreements Ethiopian government signed with the governments of Kuwait and Sudan few years ago a significant amount of fuel is purchased from the state owned national oil companies of the two countries without a tender.

Fifty percent of the gasoil and 75 percent of the jet fuel would be supplied by the Kuwait Petroleum Corporation (KPC). Fifty percent of the gasoil, 25 percent of jet fuel would be purchased from PetroChina.

Sudan Petroleum Corporation (SPC) would supply 40 percent of the gasoline while the balance would be purchased from winner of the bid. Fuel oil would be purchased in a separate bid in March 2019. Neighboring Sudan used to supply 80 percent of Ethiopia’s gasoline demand. But due to its internal economic challenges the country is reducing the gasoline supply to Ethiopia. Sources told The Reporter that Sudan is actually importing some refined petroleum products such as gas oil.

PetroChina will supply sixty percent of gasoline demand in 2019. The company would source the petroleum from Yanbu Refinery in Saudi Arabia. Established in 1999 PetroChina Limited Company is the largest oil producer and distributer in China. It is also one of the largest oil companies in the world listed in the New York and Asian stock exchanges. Eighty five percent of the shares are owned by the Chinese government.