FG Will Save $1bn With Elimination of Middlemen and Adoption of Direct Sales

                        

The Minister of State for Petroleum Resources Dr Ibe Kachikwu said the Federal Government will save $1billion elimination the Oil swap deal during his appearance before a Senate adhoc Committee to investigate the offshore processing and crude swap arrangement from 2010 till date at the National Assembly complex.

The GMD disclosed that the adoption of Direct Sale Direct Purchase,DSDP, will take off next month and will save the Government one billion dollars,and was meant to replace the older arrangement of Crude oil swap initiative and the offshore Processing Arrangement OPA,which will enhance transparency.

Under the old arrangement crude is exchanged for petroleum product at a pre-determine  yield pattern through third party traders.but the DSDP method will eliminate all cost element of middlemen and save the government money by giving the NNPC the Latitude to take control of sale and purchase of crude with its partners and save money for the government.

“When I assumed duty as the GMD of NNPC, I met the Offshore Processing Arrangement (OPA) and like you know there is always room for improvement. I and my team came up with the DSDP initiative with the aim of throwing open the bidding process. This initiative has brought transparency into the crude-for-product exchange matrix and it is in tandem with global best practices,” Dr. Kachikwu informed

He stated that the new arrangement would help the Corporation to grow indigenous capacity in the international crude oil business and generate employment opportunities for indigenous companies that are selected.