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Three oil firms bidding to supply fuel to EPSE
Tadesse Hailemariam, CEO of Ethiopian Petroleum Supply Enterprise

Three oil firms bidding to supply fuel to EPSE

Three international oil trading firms bidding to supply fuel to the Ethiopian Petroleum Supply Enterprise (EPSE) in the 2019 fiscal year.

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 by October30, 2018. The bid opening was scheduled for October31, 2018. However, based on the request made by the bidders it was postponed to November8.

Tadesse Hailemariam CEO of EPSE told The Reporter that 36 oil companies bought the bid document. However, he said only three companies- TRAFIGURA PTE LTD, Vitol Oil and Petro China-have submitted their technical and financial proposals to the enterprise. Tadesse said that the bid committee was evaluating the technical proposals adding that the financial proposal will be opened next week. “If all the three companies pass the technical evaluation the financial proposal would be opened next week and the least bidder will be the winner,” he 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.

According to Tadesse, 50 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 oil trading companies through the open international tender.

Tadesse said Sudan Petroleum Corporation (SPC) would supply 40 percent of the gasoline while the balance would be purchased from oil trading firms. Fuel oil would be purchased in a separate bid in March 2019. A Saudi based private company called Bekri International has been supplying light and heavy fuel oil to Ethiopia for the past many years. EPSE is planning to import some amount of the fuel via the Eritrean port, Assab.

Tadesse told The Reporter that EPSE has requested the bidders to quote their price if they deliver the fuel at the Port of Djibouti or Assab. However, there are some challenges to start importing the fuel via Assab as there are rehabilitation work that should be done on the port facilities. The road, too, should be reconstructed. “The rehabilitation work might not be completed by January but if they expedite the rehabilitation work we could start using the Port of Assab to import some amount of the fuel any time of the year,” Tadesse said. “But we have requested the companies to quote their prices via Assab and we will see that when we open the bid next week,” he added.        

The three bidding companies are not new to Ethiopia. TRAFIGURA PTE LTD won the 2018 fuel supply contract. Headquartered in Geneva, Switzerland, TRAFIGURA has offices in Singapore, Dubai and Johannesburg. TRAFIGURA won the fuel tender floated by EPSE in September 2017. TRAFIGURA has been supplying 245000 MT of gasoline and 1,270,000 MT of diesel since January 2018. The fuel supply contract with TRAFIGURA would end in December 2018.

Petro China 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.

Vitol Oil won two tenders in a row and supplied fuel to EPSE in 2015 and 2016. The Vitol Group is a multinational corporation engaged in energy and commodity trading business. Physical trading, logistics and distribution are at the core of Vitol’s business but are complemented by refining, shipping, terminals, exploration and production, power generation, mining and retail business. 

Founded in Rotterdam in 1996, today the company has 40 offices worldwide with its largest operations in Geneva, Houston, London and Singapore. The group’s annual turnover is more than 270 billion dollars.