No fewer than 132 local and international companies offered to buy 14 cargoes of Nigerian crude oil monthly in the Nigerian National Petroleum Corporation (NNPC) 2019/2020 Direct Sale and Direct Purchase (DSDP) bid opening in Abuja.
Group Managing Director Dr. Maikanti Baru, who presided over the opening, said that the corporation would receive about 14 billion litres in a year as exchange for the crude.
“Well, we are looking at about 14 cargoes a month kind of situation and about 14billion litres in a year of products,” he said.
Baru described the occasion as a landmark event in the bid to miximise value and guarantee energy security for the nation.
The DSDP scheme was introduced in 2016 “with efficient and cost systems and processes to plug the value eroding loopholes of the January 2015 Offshore Processing Agreement (OPA) contracts”.
The NNPC said: ”Since the inception of the DSDP scheme in 2016 to March 2019, 29.5million meteoric tons (39.6 billion liters) of petroleum products have been supplied under the scheme, representing over 90 per cent of the national requirement.”
Baru explained that through a transparent competitive bidding and evaluation process, the scheme had enlisted a robust supplier mix comprising the big international players and strong Nigerian downstream companies for supply flexibility and local capacity development.
According to him, “the scheme prides itself with a competitive pricing framework (lower than the Petroleum Product Pricing Regulatory Agency (PPPRA) benchmark) which over the years has ensured significant reduction in product demurrage cost in the range of 84 per cent and cost savings of about $2.2 billion.”
He explained that the 2019-2020 DSDP tender objectives were to engage reputable companies for the Direct Sales of Nigerian crude oil and Direct Purchase of petroleum products.
The objectives are also to ensure that the selection of off-takers is aligned with tested, transparent and accountable procedures in compliance with the Public Procurement & Nigerian Content Acts.
The scheme is also to sustain transparency in all the nation’s processes and establish the best partners through a robust mix of big international players and strong Nigerian downstream companies to ensure supply reliability and local capacity development.
According to Baru, the scheme was also initiated to encourage local downstream companies while leveraging on the capacity and expertise of foreign partners.
He said the DSDP had been delivering value optimisation to the federation.