The Nigerian National Petroleum Corporation (NNPC) has issued award letters to oil companies for contracts to exchange crude oil for imported fuel.
At present, the national oil company operates the crude-swap contract (also referred to as direct sale, direct purchase model) to meet the local demand for refined crude products as the inability of refineries to meet fuel demands.
The nation’s refineries have a combined refining capacity of 445,000 barrels per day, although they are currently operating at below capacity.
“Under the DSDP arrangement, the under listed fifteen (15) consortia/companies shall over the contract period, offtake crude oil and in return, deliver corresponding petroleum products of equivalent value to NNPC, subject to the terms of the agreement,” NNPC said in a statement released on Sunday.
The contract is for one year effective October 1, 2019, to September 30, 2020.
The companies that were issued letters are:
- BP/Aym Shafa
- Trafigura/AA Rano
- Eyrie/Masters/Cassiva/Asean Group
- UTM/Levene/Matrix/Petra Atlantic
- Duke Oil
- Litasco /Brittania-U
- Mocoh/Mocoh Nigeria
The list is more comprehensive than the previous one that had 10 pairings and 22 companies.
In May, the corporation had announced that 132 companies had submitted bids for the 2019 crude swap contract.
Mele Kyari, newly appointed group managing director of the NNPC, takes credit for leading the team that proposed and managed the direct sales and direct purchase (DSDP) arrangement of petroleum products from 2016 till date to replace the crude swap arrangement.
In DSDP, companies in the sector’s value chain including refiners, trading and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products.
In his takeover note, Kyari had promised to open NNPC books to public scrutiny, saying as a publicly owned company Nigerians deserve to know about the operations of the Ccompany.