Nigeria saves N673 billion from refining crude oil overseas, says NNPC.
The Nigerian National Petroleum Corporation (NNPC) says the country has saved $2.2 billion, an equivalent of N673.2 billion, from refining over 40 billion liters of crude oil abroad through Direct Sale and Direct Purchase (DSDP) scheme.
Speaking at the 2019 DSDP bid opening ceremony in Abuja, the corporation’s Group Managing Director, Dr. Maikanti Baru, noted that since the introduction of the scheme in 2016, 29.5 million metric tons (39.6 billion liters) of petroleum products had been supplied on the platform, representing over 90 percent of the national requirement.
Adopted to replace the Crude Oil Swap and the Offshore Processing Arrangement, the DSDP allows the NNPC to sell crude directly to off-shore refiners and get products in return.
“The scheme prides itself with a competitive pricing framework (lower than the PPPRA benchmark), which over the years has ensured a significant reduction in product demurrage cost in the range of 84 percent and cost-saving of about $2.2 billion,” he stated.
The GMD maintained that the project delivers value optimization to the federation and provides a more efficient and cost-effective system as well as a better option to address the loopholes in previous schemes.
The NNPC boss submitted that 132 bids had been received for the 2019/2020 edition where over 14 cargoes of crude would be supplied to Europe and other countries for refining.
“We are looking at 14 cargoes per month at about 14 billion liters of products in a year,” he added.
According to him, the DSDP tender board would engage reputable companies and ensure that the selection of off-takers was transparent and followed due process in deference to the provisions of the Public Procurement and Nigerian Content Acts.
Baru is optimistic that the process would establish sustainable partners through a robust mix of big international firms and strong Nigerian downstream establishments for supply reliability and local capacity development while leveraging the capacity and expertise of foreign associates.