Nigeria will replace crude oil swap agreements in March with a system under which it will directly sell crude oil to refiners and purchase refined oil products from them, the state oil company said on Tuesday.
Nigeria to end oil swaps, go directly to refiners from March
Alegbe said this had been announced by Emmanuel Ibe Kachikwu, minister of state for petroleum resources, during an appearance before a parliamentary committee set up to investigate NNPC swap arrangements.
NNPC
Nigeria, Africa's biggest oil producer, is almost wholly reliant on imported gasoline, kerosene and other petroleum products, despite exporting around 2 million barrels per day (bpd) of crude oil.
Efforts to revamp the country's own long-neglected refineries have met with limited success.
The Nigerian National Petroleum Corporation (NNPC) said in November that it would move away from swap agreements, also called "offshore processing arrangements" (OPAs), to improve transparency.
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"The crude-for-products exchange arrangement popularly referred to as crude swap will be replaced by a Direct-Sale–Direct-Purchase (DSDP) arrangement which would take off next month," NNPC spokesman Ohi Alegbe said on Tuesday.
"The minister stated that the DSDP option eliminates all the cost elements of middlemen and gives the NNPC the latitude to take control of sale and purchase of the crude oil transaction with its partners, adding that the initiative would save $1 billion for the federal government," said Alegbe.
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