Petroleum Africa
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Wednesday, February 3, 2016
NNPC is replacing the crude oil swap agreements in March and going directly to sell to the refiners. The state-run firm will then turn around and purchase oil products from the refiners.
The news of the move away from swap agreements was originally revealed in Q4 2015 as a way to improve transparency.
“The crude-for-products exchange arrangement popularly referred to as crude swap will be replaced by a Direct-Sale-Direct-Purchase (DSDP) arrangement which would take off next month,” NNPC spokesman Ohi Alegbe said.
Emmanuel Ibe Kachikwu, Minister of State for Petroleum Resources, announced the switch during his appearance before a parliamentary committee set up to investigate NNPC swap arrangements.
“The Minister stated that the DSDP option eliminates all the cost elements of middlemen and gives the NNPC the latitude to take control of sale and purchase of the crude oil transaction with its partners, adding that the initiative would save $1 billion for the federal government,” Alegbe added.
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