NNPC signs agree­ment with Bri­tish Petroleum for di­rect pur­chase of petrol to boost sup­ply ahead of yule­tide, elec­tions

Business a.m. - - COMPANY - Nse An­thony-Uko

IN READI­NESS TO SUS­TAIN ro­bust sup­ply of petroleum prod­ucts across the coun­try and es­pe­cially go­ing into the Yule­tide pe­riod and be­yond, the Nige­rian Na­tional Petroleum Cor­po­ra­tion (NNPC) has 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 petrol.

The agree­ment will form 20 per­cent of NNPC’s to­tal petrol 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.

Africa’s largest pro­ducer of crude oil and the sixth in the world, Nige­ria, iron­i­cally im­ports the bulk of petroleum prod­ucts for its do­mes­tic use, of­ten trad­ing crude for re­fined prod­ucts, a sit­u­a­tion ex­pected to change when the multi­bil­lion dol­lars Dan­gote Re­fin­ery be­comes op­er­a­tional in 2020.

Speak­ing shortly after a brief sign­ing cer­e­mony at the NNPC Tow­ers on Thurs­day, Maikanti Baru, group man­ag­ing di­rec­tor of the cor­po­ra­tion, said as the na­tion’s prod­ucts sup­plier of last re­sort, NNPC was com­mit­ted to prod­ucts avail­abil­ity by invit­ing new and old play­ers to play in the Nige­rian oil sec­tor.

He said over the years, BP had 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.

“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.

The NNPC helms­man also com­mended BP for choos­ing to part­ner with AYM Shafa, a lo­cal oil com­pany, which he said had been ex­pand­ing its down­stream foot­prints across the nook and cran­nies of the coun­try.

“BP’s part­ner­ship with AYM Shafa to­wards de­liv­er­ing on its DSDP obli­ga­tions makes it a per­fect fit for our plans to en­sure that there is ad­e­quate sup­ply of prod­ucts through­out the com­ing yule­tide and even be­yond the elec­tion pe­riod. In AYM Shafa, you are talk­ing of a lo­cal com­pany with over 150 re­tail out­lets, de­pots as well as a good net­work of trucks na­tion­wide,” Baru added.

Re­spond­ing, John Goodridge, the head of mar­ket­ing and orig­i­na­tion of BP’s oil trad­ing busi­ness, 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.

He said the ul­ti­mate was to en­sure that over the next six months, Nige­ria does not wit­ness any prod­ucts short­ages.

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.

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