Zambia seeks permanent crude oil supplier

Feb 21, 2002 01:00 AM

The Zambian Ministry of Energy and Water Development says it will advertise the contract to engage a permanent contractor who will supply crude oil to Indeni Petroleum Refinery. Energy Minister Kaunda Lembalemba said in Lusaka the contract given to Total Outremer of France was only meant to supply feed stock on a stop gap basis while the government sought to engage a permanent supplier.
The minister said all tender documents were now ready to allow oil marketing companies (OMCs) to tender and the process of scrutiny and selection should be completed by June. Mr Lembalemba said Total Outremer would between now and the time the new contractor is found bring in 90,000 tons of crude oil in an addition to the stocks in Tazama tanks at Dar-es Salaam and Total International stocks at the Zambia National Oil Company (ZNOC) depot.

These have a combined quantity of about 120, 000 tons of crude oil which Total Outremer would buy under the supply contract. The minister said government was looking for a supplier who would help reduce the cost of the commodity, flexible in business dealings and also ensure a constant flow of supply to the refinery.
He indicated these were some of the issues that made it difficult to continue under the Total International arrangement who were demanding upfront payment from the OMCs and ZNOC while the supply levels remained erratic. "We are looking for a company with the interest of the country at heart to reduce fuel prices at pump level because we can not afford buying expensive fuel in Zambia while the rest of the region have cheaper fuel," Mr Lembalemba said.

Under the Total Outremer contract, OMCs are given 15 days which the minister noted would give the companies some breathing space to plan their businesses. The minister said his complaints against the Total International arrangement was not based on the contract per se since he was never privileged to the contract. He said the concerns raised related to the mode of payment which did not support sustainable operations by the oil marketing companies.
"We don't want to be drawn into politics here because I was not condemning the contract but the issue of asking for upfront payments for stock that sometimes never came," he said. He said the preoccupation for the ministry was to revive the oil industry in Zambia.

Source: The Times of Zambia
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