Energy
Oil swap deals: PPMC accuses Duke Oil, Trafigura of lifting crude without contracts
TWO oil companies were said to have lifted $24 billion worth of crude oil out of the country without formal contracts were signed between the government and them.
National Daily gathered that at the House of Representatives Adhoc Committee set up to investigate the Oil Swap deals, it was discovered that Duke oil, a wholly owned international subsidiary of the NNPC lifted 33.7 million metric tonnes of crude while Trafigura exported 12 million metric tonnes.
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 Committee chaired by Hon Zakari Mohammed from Kwara State was informed last week that the two firms had successfully lifted the crude before formal contract agreement were signed between them and the Pipelines and Product Marketing Company confirmed to the committee that while the lifting of crude started way back in 2011, the agreement for the contract was actually signed in 2014 three years after the commencement of crude lift.
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 contract were signed.
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 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.
NNPC had September, 2015named Duke Oil, Carlson and Napoil as the three new companies to engage in Offshore Processing Agreement (OPA).
The corporation, however, said that the deal would be a stop-gap arrangement which is designed to run for three months and obliges the corporation to allocate a certain volume of crude oil within the period for refining at offshore locations in exchange for petroleum products at pre-agreed yield pattern.
Under the OPA agreement, NNPC allocates a total of 210, 000 barrels of crude oil per day for refining at offshore locations in exchange for petroleum products at pre-agreed yield pattern.