…says it will save $1bn for Nigeria
By Odunewu Segun
Nigeria is set to replace the crude-for-products exchange arrangement popularly called crude swap with a Direct-Sale-Direct-Purchase (DSDP) arrangement by March, 2016.
According to the Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Ibe Kachikwu who announced this during his appearance before a House of Rep Ad-Hoc committee said the new initiative will save the Federal Government one $1 billion.
While testifying before the Ad-Hoc Committee investigating NNPC’s offshore processing and crude swap arrangement for the period between 2010 to date, Kachikwu that the new arrangement will introduce and entrench transparency into the crude oil for product transaction by the Corporation in line with global best practices.
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 one billion dollars for the Federal Government.
Throwing more light on the need for the introduction of the DSDP, Dr. Kachikwu noted that the policy is aimed at reducing the gaps inherent in the OPA and the losses incurred by the NNPC in the past.
He stated that the new arrangement would help the Corporation to grow indigenous capacity in the international crude oil business and generate employment opportunities for indigenous companies that are selected.
The Minister informed that the DSDP initiative gives other government agencies such as the Bureau of Public Procurement (BPP) and Nigeria Extractive Industry and Transparency Initiative (NEITI) the opportunity to be a part of the bidding process in order to engender adherence to due process.