Nigeria saves $500 million through direct sales of crude oil

More than $500 million has been saved through the Direct Sale of Crude Oil and Direct Purchase of Products (DSDP) programme, the Nigerian National Petroleum Corporation, NNPC, has said.

The Group Managing Director of the Corporation, Maikanti Baru, made this disclosure, Thursday, while addressing interested bidders and at the NNPC Towers in Abuja.

A release by NNPC spokesperson, Ndu Ughumadu, stated that no fewer than 128 Indigenous and International Oil and Gas companies have indicated interest to participate in the DSDP programme.

The DSDP arrangement, Mr. Ughumadu said, is a model introduced last year and is carried out through direct sales of crude oil to refiners or consultants, who in turn supply NNPC with equivalent worth of products. The batch over which the bids were opened is scheduled to last for the next one year, starting from April 1, he added.

The statement quoted Mr. Baru as saying that the DSDP had saved over $500 million, particularly through reduction in the amount paid on demurrage by the corporation.

The NNPC boss described the DSDP as a major component of the NNPC’s
petroleum products supply portfolio, stressing that since inception, it has greatly helped in the stabilization of product supply to the nation.

“The DSDP programme has ensured that the supply from the refineries is fully augmented to meet national supply and sustained over 30 days sufficiency of Premium Motor Spirit, PMS, otherwise known as petrol,” he said.

Touting the transparency of the programme, Mr. Baru said the DSDP arrangement was a major instrument of partnership between NNPC and product suppliers, both local and international, adding that over the last one year, significant lessons have been learnt which have been incorporated into the tender process in order to improve quality assurance.

“One of the cardinal principles of NNPC under my leadership is the entrenchment of measures that will ensure transparency, accountability, performance and profitability in line with our FACTI principle of a Focused, Accountable, Competitive, Transparent Organization conducting its business with Integrity as enshrined in our 12 Business Focus Areas (BUFA),” the GMD stated.

According to him, the DSDP programme was a major instrument for the attainment of this cardinal objective which he declared would be guided by the overriding public interest and in compliance with extant laws and regulations.

According to the statement, the Group General Manager, Crude Oil Marketing Division, Mele Kyari, said the tender process was to optimize revenue for the Federal Government in compliance with the anti-corruption drive of the Government, adding that yardsticks for successful bidders would include, possession of financial strength, cognate experience in crude oil business as well as competence to deliver on mandate.