Nigeria will replace crude oil swap agreements beginning of March 2016 with a system under which it will directly sell crude oil to refiners and purchase refined oil products from them, the state oil company announced, Reuters reported.
In November 2015, the Nigerian National Petroleum Corporation (NNPC) said it would cancel the also called “offshore processing arrangements” (OPAs), a controversial oil bartering program which used middlemen to pay for refined products from foreign partners in opaque deals, Quartz published.
Africa’s biggest oil producer is almost wholly reliant on imported gasoline, kerosene and other petroleum products, despite exporting around 2 mmbbl of crude oil. Efforts to revamp the country’s own long-neglected refineries have met with limited success.
“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.
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.
The swap deals gained notoriety in the last six years under president Goodluck Jonathan’s administration with former petroleum minister Diezani Allison-Madueke overseeing the process. Between 2010 and 2014, Nigeria is estimated to have channeled over 352m barrels of oil worth a total of $35b into oil swap deals. Allison-Madueke was arrested in on allegations of bribery and corruption.
