Repsol y Moeve pujan por 1.500 millones del Ejército

Repsol and Moeve are bidding for a nearly 1.5 billion euro contract to supply liquid fuels to the Spanish Ministry of Defense, covering everything from fueling their ships and aircraft to heating military facilities. Moeve confirms to EXPANSION that it will participate in the bidding process, and Repsol is almost certain to do the same, having taken part in the previous two framework agreements in 2018 and 2022.

The Ministry of Defense opened the new tender at the end of March as the current contract, worth 768 million euros and starting in 2022, is nearing its end. Its initial term extended to November 2024, with a maximum of three more years, until the end of 2027.

Repsol secured five of the twelve lots in the 2022 contract, with its total awards amounting to about 207 million euros, nearly 27% of the maximum value of the contract. Among the lots secured were supplies of fuel for ships and aircraft. Moeve won one of the lots, for fuel for aviation turbines at Canary Islands bases. Altogether, the company won around 55 million euros.

Both companies have a strong interest in the contract, as their quantities have doubled compared to previous tenders in 2022 and 2018. However, the main contractor of the current framework agreement was British-based Novum Energy Trading Corp, which secured 460 million euros across two lots: one for naval diesel and another for aviation turbine fuel through the military pipeline connecting Rota naval base in Cádiz to Zaragoza, known as Rotaza.

The bidding process for the current public tender is pending a decision from the Central Administrative Tribunal of Contractual Resources (TACRC), as some lots are blocked by a lawsuit filed by the Catalan firm Overseas Energies. The submission deadline was May 4th, and Moeve argues it could not submit its proposal due to several issues.

After reviewing the information provided by the company, the TACRC cautiously suspended the procurement procedure for lots 1, 3, 4, 5, 6, 8, and 10, worth nearly 1.326 million euros, including extensions. The largest lot is 8, for aviation turbine fuel through the Rotaza pipeline, worth 701.5 million euros, or 47.5% of the total bidding amount.

The second-largest lot is for the supply of gasoline, class A, B, and C, and HVO (renewable diesel) for the Peninsula and Balearic Islands, worth 311.67 million euros, or 21.1% of the total framework agreement. Following that is the allocation for naval diesel fuel (F-76) to various naval bases, with a maximum of 241 million euros, or 16.32% of the total contract value.

The next most significant lot is for aviation turbine fuel at Canary Islands bases, with a quantity close to 110 million euros. This lot was awarded to Moeve in the 2022 framework agreement, which is still in effect. However, the Ministry of Defense has doubled the maximum quantity for this part of the contract, increasing it from about 55 million euros to over 100 million euros in just four years.

The remaining lots are below 100 million euros, ranging from 3.7 million to 31.3 million euros. Public spending on fuel for military ships and aircraft has doubled since 2018. The new framework agreement for supplying fuel to Spain's armed forces ships and for heating exceeds the previous one, signed in 2022, and surpasses the contract from 2018 by a factor of 92%.

The 2022 contract was worth about 768 million euros, meaning the current bidding process is 92% higher. The new contract is also more than double the 711.3 million euros allocated to the 2018 defense contract. Inflation and geopolitical tensions have driven up military spending worldwide and in Spain. Finally, the increased spending on fuel for Spain's armed forces also reflects the rise in investment in all types of military vehicles, such as ships and warships.