NNPC diverts 445,000 barrels into swap scheme.

A total of 445,000 barrels of crude oil allocation for local refining in Nigeria are now being diverted for the Offshore Processing Agreement (OPA) and the crude oil for product SWAP arrangements entered into by the Nigerian National Petroleum Corporation (NNPC), New Telegraph has learnt.
A source at the NNPC, who disclosed this to this newspaper, added that the arrangements were to put the allocations into “justifiable and lucrative” use, following the total halt of the four refineries in Nigeria.

The output of all the four refineries in Nigeria has completely fallen to zero, as the Port Harcourt refinery which hitherto held forth for the four refining assets has also been grounded. NNPC allocates 445,000 barrels daily to refineries in Port Harcourt, Warri and Kaduna, but the allocation, the source added, became stranded after the Port Harcourt refineries got grounded in late October.

The two other refineries have been grounded earlier. “The refineries have been receiving staggering allocations since 2014 due to inefficiency. In 2014, the installations received a total of 25.84 million barrels (3.5 million metric tonnes) of (dry) crude oil, condensate and slops in the year 2014.

This translates to 70,793 barrels of crude oil, condensates and slops per day. But as I speak to you now, they are totally grounded while the allocations to them are being channelled into other use.

“My brother, the truth is that the diversion is done in good faith for two reasons; number one is to get more refined products to wet Nigeria during this yuletide and the second is to raise part of the $500 million required to fix the refineries,” the source said. NNPC had on September 8 set up four new crude swap contracts as replacements for those cancelled in August.

The deals are to stop the shortage of Premium Motor Spirit (PMS) also known as petrol through a crude-for-refined-products deals vital for bringing in over 20 million litres of fuel into the country.

The new Group Managing Director, NNPC, Dr. Ibe Kachikwu, had in August cancelled the 2015 deals with Sahara Group, Aiteo Group and NNPC’s trading arm, Duke Oil, because they were, according to the NNPC statement, “skewed in favour of the companies.”