Buhari’s anti-corruption hammer hits Top Govt Corporation

By Joshua Amaugo February 3, 2016 15:10

Buhari’s anti-corruption hammer hits Top Govt Corporation

President Muhammadu Buhari through the Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Ibe Kachikwu, has said that 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.

Kachikwu made this known when he appeared before the House of Representatives Ad-Hoc Committee set up to investigate the Corporation’s offshore processing and crude swap arrangement between 2010 to date at the National Assembly Complex in Abuja.

Clarifying the directive in a statement released by the corporation’s spokesperson, Ohi Alegbe, he stated that the DSDP arrangement was adopted to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement, OPA, so as to introduce and entrench transparency into the crude oil for product transaction by the state-run oil firm in line with global best practices.

Explaining further, he said previously, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.

In order to eliminate all the cost elements of middlemen and give the NNPC the latitude to take control of sale and purchase of the crude oil transaction with its partners, the DSDP option was crafted.

According to Kachikwu, the new arrangement will take effect next month.

“When I assumed duty as the GMD of NNPC, I met the 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.”

Under this arrangement, the influence of the minister in the selection of bid winners is whittled down, as it gives all bidders the opportunity to be assessed transparently based on their global and national track record of performance before the best companies with the required capacities are selected.

The DSDP initiative allows other government agencies such as the Bureau of Public Procurement, BPP, and Nigeria Extractive Industry and Transparency Initiative, NEITI, the opportunity to be part of the bidding process in order to engender adherence to due process.

Kachikwu noted that process when kick started will save the nation not less than $1billion which can be channelled to order areas of production.

Aside, it will allow Corporation to grow indigenous capability in the international crude oil business and create job opportunities for indigenous companies that are selected.

On some of the illicit transactions alleged over non-transparent nature of past crude-for-products exchange arrangements, Kachikwu assured the legislators that his Ministry would deploy technology to track cargoes and trans-shipment at the reception depots in order to forestall any incidence of round-tripping.

On the new price modulation policy on petroleum products, he said the initiative has rid the Federal Government the burden of subsidy on imported petroleum products in January this year.