FG probes NNPC over crude oil swap contract

The Federal Gov­ernment has launched an in­vestigation to determine whether the country has been short-changed through fraud­ulent practices of Nige­rian National Petroleum Corporation (NNPC) of­ficials in the crude for refined products swap deals entered into with some foreign compa­nies.

Sources from the NNPC disclosed that some of its top officers have been visiting the Economic and Financial Crimes Commission (EFCC) in the past two weeks to say what they know about the deals which involves PPMC and some NNPC trading sub­sidiaries.

The Nigerian government is reported losing huge sums of money through shady contracts in which crude oil worth billions of dollars is given to traders in exchange for refined imports, mainly premium motor spirit (petrol). While the NNPC supplies the agreed crude quantity of crude to the companies, there is allegation that the coun­try does not get equivalent quantity of refined petroleum products.

It is not clear if the pres­ent investigation is part of a larger probe of the NNPC which Nigerians have been clamouring for since Mu­hammadu Buhari became Nigeria’s president. The EFCC and Department of State Services (DSS) sourc­es said began the investiga­tion last month. The security agencies it was learnt want to find out how the value of the crude and products were computed and determined. “It appears that the value of the crude was more than the value of the refined import­ed,” the source said.

The contracts, known as offshore processing agree­ments (OPAs) are between Pipelines and Product Mar­keting Company (PPMC), a subsidiary of the NNPC and three oil trading companies; Sahara Group, Aiteo and Duke Oil, the trading subsid­iary of NNPC.

The source hinted that apart from the oil swap deals, the security agen­cies are also examining the expired contracts which the NNPC had with Swiss trader, Trafigura, Taleveras, Ontario Oil and Gas. The source disclosed that some top officials of the PPMC including the head were among those invited to shade light on the deals.

According to a senior of­ficial of PPMC, “It started about two weeks ago…he was called in to the DSS everyday since Thursday and before that by the EFCC.”

A statement from the NNPC last week said some of its officials were invited by the agencies “to shed light” on the contracts and that none had been detained or arrested as part of the investigation.

The Nigerian Extractive Industries Transparency Ini­tiative has said there was a revenue loss of at least $600 million due to a discrepancy between the value of the crude and the products de­livered. The figure was taken from its 2009-2011 and 2012 audits of the oil and gas in­dustry, the latest was released this year. However, some contract-holders have said that the discrepancies in value were reconciled.

The Sahara Group, which receives 90,000 barrels per day for processing through an agreement with the So­ciete Ivorienne de Raffinage (SIR), said it was invited to the EFCC and submitted in­formation to show that its contract was justified.

Aiteo and Duke Oil receive 90,000 and 30,000 barrels of oil per day in the contract. A report from Reuters at the weekend said Taleveras, that held a crude swaps contract between 2011 and December 2014 via Duke Oil, said that it did not owe any money and it would deliver premium mo­tor spirit until end of June to balance out what it received in crude.


-The Sun

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