FG Saves $1bn Through Direct Sale Of Crude Oil
Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has confirmed huge benefit accruing to the country following the replacement the offshore processing arrangement (OPA) and crude oil swap with the Direct Purchase of Petroleum Products (DSDP). According to the minister, the country saved a sum of $1 billion (approximately N360billion) for the introduction of the new method of trading crude oil for refined products known as DSDP between 2015 and 2016.
The minister disclosed this in the ministry’s monthly publication, Petroleum Periscope Newsletter, 16th Edition, which focused on the performance of the nation’s petroleum downstream sector.
Speaking in a podcast published in the online newsletter of the ministry, Dr. Kachikwu described the transition as a successful initiative which has reduced the challenges posed by the swap model.
He expressed confidence that the current administration will do all it can to ensure the availability of petroleum products throughout the country with the implementation of the DSDP programme as measures are being put in place to perfect the working of local refineries.
He said: “From where we came, what we have done and with the intent of where we are going, we have our hands rounded on the refinery issues but a whole lot of work still need to be done.”
LEADERSHIP recalls that the group managing director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru had in early February, while declaring the 2018/2019 bids for the DSDP open, said the new scheme had in the last one year saved the country over half a billion dollars and that the DSDP now guarantees that products are received by it in full and with extra margins, unlike it was with the OPA.
Under the old order, crude oil was exchanged for refined petroleum products through third party traders at a pre-determined yield pattern.
The NNPC usually allocated 445,000 barrels per day crude for the local refineries but the refineries utilise less than that and the balance of the crude is then traded off in swap deals and exports.
The corporation had in 2016 replaced the offshore processing arrangement (OPA) and crude oil swap with the DSDP arrangement, sequel to heavy criticism which trailed the contracts preserved to short-changed Nigeria.
The Nigeria Extractive Industries Transparency Initiative (NEITI) in 2015 estimated that the nation lost $966million to crude oil swap deal between 2009 and 2012; billions of naira in subsequent years until the NNPC heeded the call for the discontinuation of the OPA in April 2016.
Similarly, a report by Natural Resource Governance Institute (NRGI) in 2015 revealed that the contracts under the last administration contained many unclear or unbalanced terms and were sometimes poorly managed. The report also raised questions about some of the companies selected and concluded that NNPC’s oil sales system during this period suffered from high corruption risks and failed to maximize returns for the nation.
However, all this seemed to have changed once the new swap, DSDP, was adopted. The NRGI report had initially noted that the DSDP agreements had significantly better terms, transparency and management compared with preceding agreements, but NNPC and the DSDP contractors still control the flows of information and accountability around these large and valuable but niche deals.
The Corporation under the NNPC Act (LFN Cap. 320) is empowered to engage in all commercial activities relating to petroleum operations.
… Commits N10bn To N-Build
The Federal Government has earmarked N10 billion for the N-Build component of the N-Power programme designed to impact skills and enhance employability of Nigerian from 18 years to 35 years. Mr Afolabi Imoukhuede, Senior Special Assistant to the President on Job Creation, disclosed this in Abuja at a stakeholders’ meeting held at the State House Auditorium on Thursday. The Federal Government, in 2016, launched the N-Power programme designed to help young Nigerians to acquire and develop life-long skills. Imoukhuede said that the goal of the N-Build programme was to increase the skill competency and employability of Nigerian youths and improve their incomes. He said that the essence of the stakeholders’ meeting was to ensure that all the stakeholders were on the ‘same page’. “We need to harmonise for a sustainable technical and vocational programme such as the N-Build programme that focuses on skills for entrepreneurship and job-competency. “We must ensure that we have our partners who are the employers; we must ensure that we have councils who partners with us – Council for Registered Builders, Council for Automotive Design, Council for Tourism Professionals in the Hospitality Industry. “We must also ensure that our training centre heads, the Federal Ministry of Labour and Employment which is the oversight ministry for this programme, are on same page with us.
“We have to come together to be able to review the success of the formal launch which the vice-president did in the month of May,’’ he said. He noted that the training was rolled out on March 1 and rounded off in May with the first set. According to him, there are currently 10,000 trainees who have been trained and doing apprenticeship across the country. Imoukhuede said that it was important to review the first training before the next batch would be rolled out, “We have this session to review the successes, take improvement, learn the lessons. “We should ask ourselves: What are the things we can do better? A lot of our youths want to gain skill competences. “For the graduate component of N-Power where we have moblised 500,000 —300,000 since December 2016, and 200,000 since Aug. 1 this year – they rolled in for a two-year paid volunteer programme which is a learnwork apprenticeship programme. “Then, we have the non-graduate component is in two broad areas which focuses on vocational training and apprenticeship. “We have the construction, automobile and the hospitality industry represented; they are the three key industries we are targeting for now.
“In addition, we have N-Power Knowledge which further deals with technology — hardware repair and maintenance training, software development training and creative -where we train on graphics, animation, illustration among others,’’ he said. The special assistant said that apart from the training, there was an investment of N250, 000 per trainee by the Federal Government. He said that the investment comprised tools and consumables provided according the trade each trainee signed for. Imoukhuede said that training consumables were also provided for each of the N250 centres in addition to tuition fee, training manuals and log books for every trainee. Earlier, Mr Nsika Okon, Chief Admin Officer, Job Creation Unit, Presidency, said that President Muhammadu Buhari’s administration deserved commendation for its massive empowerment programmes.