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Trafigura, Duke lifted $24bn crude without contracts – PPMC

By on January 22, 2016

Investigation into the crude exchange deals of the Nigerian National Petroleum Corporation has revealed that two trading firms, Trafigura and Duke Oil, lifted $24bn worth of crude oil out of the country before formal contracts were signed.

While Duke Oil, a subsidiary of the NNPC, lifted 33.7 million metric tonnes of crude, Trafigura exported 12 mmt.

The swap deals involved the exchange of crude oil for refined petroleum products in which the corporation gave out part of its 445,000 barrels daily share of crude oil to trading companies.

The House of Representatives is investigating the controversial deals, covering the period of 2010 to 2015. The deals were terminated in January 2015.

The investigation is being conducted by the Ad Hoc Committee on Crude Swap chaired by an All Progressives Congress lawmaker from Kwara State, Mr. Zakari Mohammed.

The committee was informed on Wednesday that the two firms had successfully lifted the crude before formal contract agreements were signed between them and the Pipelines and Product Marketing Company.

Officials of the PPMC led by the Managing Director, Mrs. Esther Nnamdi-Ogbue, confirmed to the committee that while the lifting of the crude started way back in 2011, it was not until December 2014 that formal contracts were signed.

In attendance were also the PPMC’s Executive Director, Commercial & Distribution, Mr. Justin Ezeala, and the Executive Director, Storage, Mrs. Farida Katagun.

The officials claimed that they were newly appointed to their present positions, but admitted that the records they met confirmed that crude was lifted by the trading firms before the contracts were signed.

Ezeala said, “The records we have point to the fact that, yes, the swap crude was being lifted before the contracts.

“The records show that the contracts were eventually signed in December 2014. That was what we met on the ground.”

The officials also admitted that there was no evidence of compliance with procurement procedures in the transactions.

On her part, Nnamdi-Ogbue told the committee that she could not find any evidence of presidential approval or NNPC board approval in her files regarding the deals.

Further disclosures indicated that due to lack of capacity to deliver, Duke Oil contracted three other trading firms – Aiteo, Ontario and Taleveras – to lift the crude in exchange for refined products.

The firms, the PPMC said, still had $228.5m worth of refined products outstanding to be delivered to the country under the swap arrangement.

But, the Managing Director of Duke Oil, Mr. Abdulkadir Seidu, denied that his company sub-let the swap contracts to other firms due to lack of capacity to deliver.

He argued that sub-letting in the business environment was allowed so long as the main contractor could effectively supervise the deals.

Seidu said Duke Oil delivered its products to the country, adding that the only issue left was the reconciliation of the figures with the PPMC.

“We actually delivered in line with the terms of the contracts. What is left to be done is the reconciliation of the figures with the PPMC,” Seidu added.

 

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One Comment

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