Nigeria to adopt Direct Sale-Direct Purchase to replace the Crude Oil Swap initiative
The Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Ibe Kachikwu, has disclosed that 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.
Dr. Kachikwu reportedly made this disclosure when he appeared before the House of Representatives Ad-Hoc Committee set up to investigate the Corporation’s offshore processing and crude swap arrangement for the period between 2010 to date at the National Assembly Complex, Abuja.
He noted that the DSDP was adopted to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement so as to introduce and entrench transparency into the crude oil for product transaction by the Corporation in line with global best practices.
Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.
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.
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