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VR CAPITAL BUY 25% OF P&ID AS NIGERIA FACE $9BN FINE

VR CAPITAL BUY 25% OF P&ID AS NIGERIA FACE $9BN FINE

05 June 2019

First, a health warning. This article is about recalcitrant, inept and quite possibly corrupt Nigerian politicians and government ministers. It is certainly about incompetence and misconduct in public office. It...

DISASTER AS UNEMPLOYMENT LEAPS BY 30%  TO 20.9m

DISASTER AS UNEMPLOYMENT LEAPS BY 30% TO 20.9m

29 May 2019

Nigeria is sleepwalking into a disaster which has the potential to unleash instability, insecurity and crippling hardship. Unemployment is always a cause for concern, it is the clearest indication that...

 NIGERIA NGIGE UNDEREMPLOYED OR UNEMPLOYABLE?

NIGERIA NGIGE UNDEREMPLOYED OR UNEMPLOYABLE?

08 May 2019

Working on the assumption that the Minister of Labour and Employment, Senator Chris Ngige has not been misquoted it is difficult to understand his recent pronouncement and what now seems...

NIGERIA ANOTHER MOU ANOTHER DAY

NIGERIA ANOTHER MOU ANOTHER DAY

01 May 2019

Nigeria has announced ambitious plans to double its oil production by 2025, targetting 4 million bpd in six years’ . Maikanti Baru, Group Managing Director at the Nigerian National Petroleum...

NNPC REFINERY WOES 2019

NNPC REFINERY WOES 2019

24 April 2019

The Nigerian Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has not unpredictably, stated that Nigeria’s continuous subsidy of petrol consumption means the Nigerian National Petroleum Corporation (NNPC) will...

NIGERIA OPEC STAND FIRM

NIGERIA OPEC STAND FIRM

28 March 2019

Nigeria and other member countries of the Organisation of Petroleum Exporting Countries (OPEC) as well as their non-OPEC allies led by the Russian Federation have said they are committed to...

PALM OIL PRODUCTION UNDERPERFORMS

PALM OIL PRODUCTION UNDERPERFORMS

18 March 2019

PALM OIL PRODUCTION A MEAGRE PERFORMANCE Nigeria from gaining a substantial share of the global oil palm industry now worth $62 billion annually, casting doubts on government’s ability to grow...

NIGERIA REFINING THE VISION

NIGERIA REFINING THE VISION

18 March 2019

NIGERIA REFINING THE VISION Nigeria is the only OPEC member country that imports gasoline (PMS) and holds the dubious distinction of being the largest importer in the world. The Nigerian...

IS THE PGB FATALLY FLAWED?

IS THE PGB FATALLY FLAWED?

18 March 2019

IS THE PIGB FATALLY FLAWED? Ten years after the Petroleum Industry Bill began its tortuous odyssey which has included the Bill being broken into four portions, both houses of the...

CBN PUMP UP THE T-BILLS

CBN PUMP UP THE T-BILLS

18 March 2019

CBN PUMP UP THE T-BILLS The Central Bank of Nigeria (CBN) plans to raise a total of N1.809 trillion from the debt market, in the first quarter of 2019.This is...

TIN EXPORTS NIGERIA

TIN EXPORTS NIGERIA

17 March 2019

TIN EXPORT NIGERIA Synterra are able to export high grade tin ore from Nigeria. We agregate the Mining production of a number of artisanal miners and consolidate volumes for exportSynterra...

BERYLLIUM MINING OPPORTUNITIES

BERYLLIUM MINING OPPORTUNITIES

17 March 2019

The Nigeria Solid Mineral and Mining Sector has in effect made the great leap forward which will now allow investors to take advantage of the vast mineral potential Nigeria possess....

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Saturday, 04 May 2019 13:19

NNPC DSDP BEAUTY PARADE ATTRACTS 132 COMPANIES

Written by

Nigerian state oil company NNPC has announced that 132 companies have participated in the bid for the highly sort after and much prized right to crude oil for product swap tender. NNPC issued the tender for the contract in March after extending the previous contract to June 2019. The Direct Sales Direct Purchase contract
evolved from the various different original offshore processing agreements. These agreements were bought in after the import subsidy scandal which saw numerous
companies implicated in fraudalent practices such as round tripping and outright false declarations of cargoes. Because the Government regulate petrol prices at a
cap below the landing cost, importers were required to reconcile the difference between their actual cost of importing and the regulated price in accordance with
an approved template.

The subsidy scandal cost Nigeria an estimated $6.8bn which is far in excess of any amount needed to repair the nations run down and dilapidated Refineries. But the
real scandal must be that

10 years on from the original import subsidy scam, Nigeria still relies almost completely on a program like DSDP to meet its own consumption
requirements and has in the process become the largest importer of gasoline on the planet .

“We actually import one million tons of PMS (Premium Motor Spirit) every month into a country that produces oil and gas and has refinery. It is a shameful thing, it
doesn’t make sense and that is what we are trying to address,” Nigerian media quoted NNPC Group Managing Director Dr Maikanti Baru as saying.

On the face of it you will not hear a more stark admission of managerial incompetence than that uttered by the man who is responsible for the shambles. Yet it is too
simplistic to accept the failing as a calamity bought about by sheer incompetence. It will not have escaped anyones attention that many companies that were
awarded the most recent DSDP crude swap contracts were amongst those indicted during the petroleum subsidy scandal. These self same companies many of whom have contracts to sell Nigerian equity crude have the same beneficial ownership. Furthermore with the elections out of the way and an inurguration of a new political set contracts held by interests that are no longer relevant needed to be terminated and new ones issued to the new dispensation.

In what can only be described as a cynical attempt by the NNPC to justify its opaque selection practises at the bid opening ceremny Group General Manager,
Crude Oil Marketing Division of the NNPC, Mallam Mele Kyari, disclosed that the key objective was to eliminate corruption. He then went on to say that the NNPC,
“would do its best efforts to conduct its own internal estimates, setting up minimum price levels. This is not a highest or lowest bidder tender, because we know some
prices are not realistic". Quite what the bid opening ceremony achieves other than provide a semblance of transparency is open to debate. What is clear is if NNPC
ever needed a pretext to create a space in which corruption thrives, the Group General Manager of COMD Mallam Mele Kyari has provided it.

The national oil company has a long tradition of awarding both crude and gas contracts in an opaque,arcane and esoteric process. I have long argued that there
should be a parallel process of compliance conducted by a number of independent 3rd party agencies such as the Independent Corrupt Practices And Other
Related Offences Commission (ICPC) and the Nigeria Extractive Industries Transparency Initiative (NEITI). Illicit financial flows (IFF) is the life blood of corruption in the
oil and gas industry. In a recent report NIETI reported that out of the 92.9 per cent contribution of the sector to IFFs in Nigeria, oil bunkering accounted for about 35 per
cent; while commercial transactions by multinationals that dominate the sector contributed more than 60 per cent.

The report went further to say that opportunities for IFFs through fraud and money laundering in Nigeria’s oil industry generally starts as administrative control failures by
those expected to exercise statutory and regulatory frameworks in the industry, adding that such results to high politicisation of discretionary powers, inadequate
corporate governance, regulatory capture, political interference, conflict of interests, tax evasion and bribery.

The DSDP tender has been described as a beauty paegent where as many companies as possible are encouraged to participate. Such is the transactional nature of
NNPC and the oil business in Nigeria that most of the contestants do not stand a chance however well qualified. The sole purpose of attracting as many participants as possible is to add to the false narrative that will be clearly exposed when the contract awards are made public.

 

 

 

 

 

 

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2 comments

  • Comment Link Philip Pars Sunday, 09 June 2019 21:50 posted by Philip Pars

    This DSDP is the real reason the Refineries do not work in Nigeria.

  • Comment Link Adewale Aboderin Saturday, 08 June 2019 14:52 posted by Adewale Aboderin

    This NNPC process is one of the most opaque and most lucrative oil trading contracts globally. If you really want to know why refineries don't work in Nigeria, this is it

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