Nigeria does not import crude oil or gas, as the needs of both are covered by domestic production. But Nigeria imports refined petroleum products from kerosene, diesel and premium motor gasoline (PMS) as the country does not have sufficient refining capacity to meet its fuel needs. Dr. Bynoe said the government should market its share of crude oil through an agent. Guyana`s share of crude oil is sold in free board (FOB) and millions of barrels with lifting devices every 8 to 10 days. NNPC crude oil trading is primarily contractual, and in 2017/2018, DSDP`s expected contractual model is an improved version of the oil-for-product swap agreement and includes the process of inviting offers of contracts for the sale and sale of crude oil by potential customers. The NNPC establishes prequalification requirements for potential clients, including: the Petroleum Industry Governance Project (IGCP), adopted on 25 May 2017 by the upper houses of the National Assembly, clearly suggests the imperative of transparency as a fundamental element in promoting institutional, regulatory and commercial reforms in the oil industry. There is a broad consensus that the commercial activities of the Nigerian oil industry need to be more transparent and accountable in order to accelerate reform efforts to diversify the economy and boost industrial growth. To this end, a number of approaches have been proposed to increase transparency in crude oil trade agreements, including with the DSDP model currently used by the NNPC. Oil for swaps comes from NNPC`s 445,000 barrels per day “Domestic Crude Allocation” (DCA). The TCA provides the total amount of crude oil, which is generally available for trading under the various contractual models used by NNPC over the years. The usual contractual models are the Refined Product Exchange Agreement (RPEA) and the Offshore Processing Agreement (OPA).
Between 2010 and 2015, the crude oil trading business model was based on the controversial oil-for-product swap until NNPC signed its first round of direct sale of crude oil and direct purchase of products (DSDP) contracts in 2016 worth up to 330,000 barrels of oil per day (b/d) . Under an EPR, crude oil is allocated to a trader and the trader is then responsible for importing certain products with a value equal to the same amount of money as crude oil, less certain agreed taxes and expenses the value of which the trader retains. In early 2011, the government, represented by NNPC subsidiaries (Duke Oil and PPMC), had signed four RPEAs with commodity traders. According to the NNPC, Nigeria has oil reserves estimated at 28.2 billion barrels of crude oil and 165 trillion standard cubic feet (scf) of gas (including 75.4 trillion scf of un associated gas). In addition, the average production capacity is 2 million barrels of crude oil per day (bpd) and 7.6 billion scf per day of gas. Dr Bynoe explained that “the CLA has put in place a mechanism for allocating the crude lifting schedule on the basis of volume claims calculated taking into account the cost-covering rules of the oil agreement.” This, he said, establishes a strict policy for the agreement and indicates that possible delays could lead to loss of value and risk production on the boat swimming, storage, production and unloading. . . .