Nigeria’s crude oil swap deal rakes in $500m

The Nigerian National Petroleum Corporation (NNPC) has so far raked in about $500 million into government’s coffers from crude oil swap deals introduced in 2016, according to the Group Managing Director (GMD) of the Dr Maikanti Baru.

The NNPC GMD said this while addressing the Technical Committee on Crude Oil Bidding in Abuja in Thursday.

Based on the success of the deal, the corporation says it has concluded plans to open about 128 bids for indigenous and foreign oil companies to compete for the first quarter of 2017.

Baru told newsmen that the opening of bids for the Direct Sale, also known as Direct Purchase (DSDP) had been ratified by the NNPC management as one of the fasted ways of curbing the crisis associated with scarcity of oil products in the country.

Her him: “The DSDP programme has also recorded significant cost savings of over half a billion dollars through major reduction in the amount we paid for both demurrage and the product themselves. It ensures that the supplies from refineries are fully augmented to meet the national supply as well as a sustained over 30 days sufficiency particularly with petrol.

“The programme is very transparent and the major instruments on the partnership between the NNPC and the product supplied to both local and international.”

He further stated that the exercise was being carried on in such a transparent manner that job creation and physical presence of the successive firms would add more values on the crude alloted to them.

Read Also: Equities break downtrend with N12bn gain

The GMD added that the major drive in the programme is to ensure that Nigerians are not left out in the gains from the oil and gas sector, adding that the need to ensure that those that emerge, whether consortium or single, must have physical presence in Nigeria was part of the deal.

But Johnson Okolanwan, a refinery expert said despite the new approach, Nigeria would still be importing finished products from outside the country.

He alleged that the deal was being cornered by firms that have their refineries outside the shores of Nigeria.

“The only way to make the bidding make sense is for government to licence building of refineries in parts of the country”, he said.

 

RipplesNigeria ….without borders, without fears

Click here to download the Ripples Nigeria App for latest updates

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now