The Direct Sale of Crude Oil and Direct Purchase of Petroleum product (DSDP) in Nigeria

 

 

In 2016, the Nigerian National Petroleum Corporation (NNPC) eliminated the Offshore Processing Agreement (OPA) through the introduction of the Direct Sales and Direct Purchase (DSDP) scheme and the DSDP scheme was to enable sustained petroleum products supply in the country, in which petroleum products to be delivered shall be equivalent in value to the Crude Oil received from NNPC subject to the general terms and conditions.

According to the NNPC, since the inception of the DSDP scheme in 2016 until March 2019, about 29.5 million metric tons (39.6 billion litres) of petroleum products have been supplied under the scheme representing over 90 per cent of the national requirement, that through a transparent competitive bidding and evaluation process, the scheme has enlisted a robust supplier mix comprising of the big international players and strong Nigerian downstream companies for supply flexibility and local capacity development, likewise, the scheme has over the years ensured a significant reduction in product demurrage cost in the range of 84% and cost savings of about 2.2 billion dollars. As for the 2019 – 2020, Direct Sale of Crude Oil and Direct Purchase of Petroleum product (DSDP) 132 companies have indicated interest to bid for about 14 billion litres of products under the scheme.

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