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PetroChina wins fuel tender

PetroChina wins fuel tender

The Chinese oil firm, PetroChina, has won the bid put by the Ethiopian Petroleum Supply Enterprise (EPSE) for the supply of fuel in 2019.

Three international oil trading firms – TRAFIGURA PTE LTD, Vitol Oil and PetroChina – were participating in the bid. Last September EPSE has floated a tender inviting international oil trading companies 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. CEO of EPSE Tadesse Hailemariam told The Reporter that all the three companies passed the technical evaluation. “All of them were qualified for the financial bid,” Tadesse said.

The bid committee opened the financial proposals on November 21. The least bidder was expected to be announced immediately. However, Tadesse said that there were some financial analyses that need to be done to declare the winner. “Because the offers were made on different scenarios, the companies quoted their price if the fuel is delivered via Djibouti and Eritrean ports. So we need to do some calculations to announce the least bidder. We will announce the bid result next week,” he said.

However, reliable sources told The Reporter that PetroChina is the least bidder.

EPSE is planning to import some amount of the fuel via the Eritrean port, Assab. “If the facilities at Assab port are rehabilitated we will start importing some amount of fuel via the port,” Tadesse said.

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 2.8-3 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 winner of the bid.

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.

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. PetroChina sourced the diesel and benzene 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.