The Nigerian National Petroleum Corporation (NNPC) on Thursday signed a six-month Direct Sale-Direct Purchase (DSDP) agreement with the British Petroleum’s (BP) trading arm, BP Oil International Ltd, for the supply of Premium Motor Spirit (petrol).
This latest agreement will represent 20 percent of NNPC’s total PMS supply under the DSDP arrangement, which basically allows the corporation to exchange crude oil with international oil traders for imported petroleum products over a period of time.
Speaking shortly after a brief signing ceremony at the NNPC Towers Abuja , the corporation’s Group Managing Director, Dr. Maikanti Baru, said that as the nation’s products supplier of last resort, NNPC was committed to products’ availability by attracting new and old operators into the nation’s oil sector.
According to him, BP has over the years demonstrated the capacity and robustness to augment the forecasted shortfall by NNPC, especially as the winter period approaches and as the nation’s elections get underway early into the New Year.
Baru said: “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
The NNPC boss also commended the BP for partnering AYM Shafa, a local oil company, which he said had been expanding its downstream operations nationwide.
Baru noted that BP’s partnership with AYM Shafa towards delivering on its DSDP obligations made it a perfect fit for the corporation’s plans to ensure that there is adequate supply of products throughout the coming Yuletide and even beyond the election period, adding that AYM Shafa has a local company with over 150 retail outlets, depots as well as a good network of trucks nationwide.
In his remarks, the Head of Marketing & Origination of BP’s oil trading business, Mr. John Goodridge, said it was a great honour for his company to be trusted by the NNPC as one of its strategic suppliers, saying that the management was “delighted to have the opportunity to work more closely with the NNPC. Going forward, we hope to grow this mutual relationship to greater things.”
He further assured that his company had a global network of refineries capable of generating the products to meet the specifications required by the NNPC, pointing out that the ultimate is to ensure that over the next six months, Nigeria does not witness any product shortage.
Introduced in 2016, the DSDP arrangement is a model carried out through direct sales of crude oil to refiners or consultants, who in turn supply NNPC with equivalent worth of products.
Since its inception, the DSDP model has not only saved NNPC millions of dollars that would have been paid through demurrage, it has also proven to be a major component of the corporation’s petroleum products supply portfolio which ensures stability in products supply nationwide.