The Nigerian National Petroleum Corporation (NNPC) has issued an invitation for bids under the model of direct sale of crude oil and direct purchase of petroleum products (DSDP).
Under this DSDP scheme, foreign refiners receive Nigerian crude oil supplies in exchange for the delivery of an equal value of refined oil products to NNPC.
The Nigerian state-held company introduced the Direct Sale-Direct Purchase model last year to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement in a bid to increase transparency into the crude oil for product transactions.
The NNPC invitation to tender stipulates that bids be submitted by February 2, 2017, and the duration of the DSDP arrangement be for a period of one year beginning April 1, 2017.
According to Platts, Nigeria’s imports o
f oil products are around 1 million mt/month, but NNPC has recently said that imports were expected to fall after the recent restart of all four state-held oil refineries in the country.
Early last year, after the Nigerian government suspended the previous crude oil swaps program, a parliamentary committee announced major anti-corruption findings in relation to the multi-billion-dollar model. The ad-hoc committee revealed that there were no formal contracts between NNPC and trading companies that received $24 billion worth of Nigerian crude oil between 2011 and 2014.
According to the results of the investigation, the former minister of petroleum resources, Diezani Alison-Madueke, illegally allowed for a swap of Nigerian crude oil for refined products to trading firms Duke Oil and Trafigura. (Source: By Tsvetana Paraskova for Oilprice.com)