BEVERLY HILLS, August 25, (THEWILL) – President Muhammadu Buhari has approved the cancellation of the offshore processing and crude swap deals for refined oil products between the Nigerian National Petroleum Corporation (NNPC) and oil traders.
A Reuters report Tuesday said Presidential spokesman, Femi Adesina confirmed the cancellation.
THEWILL can report that the crude-for-refined petroleum products contracts are usually renewed yearly and the current deal between the NNPC and traders was signed in January by the previous administration.
“Mr. President has approved the cancellation of the oil swap contracts. Mr. President has publicly expressed his displeasure over this oil swap deal,” spokesman Femi Adesina told Reuters.
A source at NNPC told the news agency that the president cancelled contracts for roughly half of the 445,000 barrels per day of crude earmarked for Nigeria’s refineries — the amount refiners use in the products swaps deals.
“The government may not have completely dumped the idea of swaps but the aim is to re-evaluate the whole contracts terminated to extract some favourable terms,” the source told Reuters.
Last month Buhari appointed a former Exxon executive to head the NNPC with a brief to root out corruption at the state-oil firm. Emmanuel Kachikwu has said he will review all production-sharing contracts and joint venture agreements with its partners.
Crude-for-products swaps became controversial after several Nigerian officials raised questions about their transparency, including the Nigeria Extractive Industries Transparency Initiative (NEITI), an EITI affiliate, and former central bank governor Lamido Sanusi.
