Group Managing Director of the NNPC Dr. Maikanti Baru said the six-month DSDP agreement will be executed through BP’s trading arm, BP Oil International
Uche Usim, Abuja
The Nigerian National Petroleum Corporation (NNPC) has signed a six-month crude-for-product deal with British Petroleum (BP) as part of efforts to guarantee supply of country’s Premium Motor Spirit (also known as petrol) needs throughout the upcoming yuletide season spanning December 2018 to January 2019.
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Group Managing Director of the NNPC Dr. Maikanti Baru who spoke after the brief signing ceremony at the NNPC Towers yesterday, said the six-month Direct Sale-Direct Purchase (DSDP) agreement will be executed through BP’s trading arm, BP Oil International Limited.
It was not immediately clear what volume would be allocated to BP as NNPC already has 10 similar deals for a total of over 300,000 barrels per day of crude out of its close to 1.9 million bpd of production as of October.
Baru however said the latest agreement with BP represents 20 percent of NNPC’s total PMS supply under the DSDP arrangement, which he explained allows the Nigerian company to exchange crude oil with international oil traders for imported petroleum products.
According to Baru, over the years, BP had demonstrated the capacity and robustness to augment the forecasted shortfall by NNPC, especially as the winter period approaches and with the nation’s elections underway early into the New Year.
“As a reliable supplier, we think BP is a brand that we can always partner with. We trust the company and we have a good relationship with it. We also believe in the company’s commitment towards the development of local content,” Baru stated.
NNPC imports about 70 percent of Nigeria’s fuel needs, mainly petrol, via swap contracts known as Direct Sale Direct Purchase (DSDP). Foreign firms must pair up with a local company to deliver the products. NNPC said that BP will be partnered by Nigerian firm, AYM Shafa.
Head of Marketing and Origination of BP’s oil trading business, Mr. John Goodridge, in his response said it was a great honour for his company to be trusted by the NNPC as one of its strategic suppliers.
“We are delighted to have the opportunity to work more closely with the NNPC. Going forward, we hope to grow this mutual relationship to greater things,” Goodridge added.
He further assured that his company boasts of a global network of refineries capable of generating the products to meet the specifications required by the NNPC.
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The BP spokesman said the ultimate was to ensure that over the next six months, Nigeria does not witness any products shortages. Since its inception, the DSDP model has not only saved NNPC millions of dollars that would have been paid through demurrage, but has also proven to be a major component of the Corporation’s petroleum products supply portfolio which ensures stability in products supply nationwide.