As the clean up of the oil sector continues, President Muhammadu Buhari has approved the cancellation of offshore processing and crude swap deals for refined oil products between the Nigerian National Petroleum Corporation (NNPC) and oil traders, Reuters reported quoting presidency sources yesterday.
The Group Managing Director of the NNPC, Dr. Ibe Kachikwu had recently hinted that all Production Sharing Contracts, Joint Venture Agreements and all other contracts between the NNPC and its various partners would be reviewed to reflect current day realities in the global oil and gas industry.
Presidency spokesman Femi Adesina confirmed the government’s position in a chat with Reuters saying, “Mr. President has approved the cancellation of the oil swap contracts. Mr. President has publicly expressed his displeasure over this oil swap deal”
The deals, initiated in January by Buhari’s predecessor, were designed to supply gasoline for crude as Africa’s top oil producer relies on imports for the bulk of its domestic consumption. But a combination of lapses in such deals has allowed billions of dollars to go unaccounted for over the years, denying the Nigerian treasury badly needed revenues.
“In 2015, nearly 20 percent of the oil sold by NNPC has been traded for petroleum products via poorly structured deals with two companies. Recent offshore processing agreements (OPAs) contained unbalanced terms that did not efficiently serve Nigeria’s needs.” The report said asking the government to direct NNPC to wind down all such.
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