Share this:

Like this:

Like Loading...
" />
Published On: Wed, Feb 26th, 2014

Nigeria loses $8bn to crude oil swap deal – Reps

Share This

House of Representatives reps logoBy Umar Muhammad Puma

Findings from the House of Representatives Public Hearing into alleged shady transactions between the Nigerian National Petroleum Corporation (NNPC) and two top oil companies in Switzerland, Vitol and Trafigura revealed that Nigeria loses a staggering $8 billion yearly to the Crude Oil-Product Exchange, otherwise known as crude swap arrangement.

In the crude swap deal, oil trading companies are allowed to lift crude oil in exchange of petroleum products such as petrol, diesel and kerosene.

The committee observed that in most cases, some of the companies involved lift crude oil without commensurate product being supplied.

Documents before the committee also showed that the NNPC allocated 445,000 barrels of crude oil per day to the following companies: Vitol Limited, Trafigura, Mercuria, Glencore, Taleveras Nigeria Limited, Sahara Energy Limited, Etenal Oil and Gas Limited, Aiteo Nigeria Limited, Ontario Oil and Gas and Rahmaniya Oil and Gas.

The Committee was of the position that Nigeria loses $8 billion in under delivered products from the crude oil swap arrangement.

A report submitted by the Nigeria Extractive Industries Transparency Initiative (NEITI) detailed how four of the oil trading firms “under delivered” products in 2011.

They are: Trafigura (173,786,600 litres); Trafigura (654,440.7 litres); Taliveras (152,308,878 litres); Aiteo Nigeria Limited (193,046,590 litres) and Ontario Oil and Gas (180,278,732 litres).

The total under delivered products amounted to 500,075,239.3 litres which based on the Committees calculation amounted to $80 billion in losses to the country’s earnings.

The crude swap deal based on the report from NEITI is a drainpipe as Nigeria has lost revenue in trillions of Dollars. It was also alleged that some of the oil trading companies owed the NNPC products worth over $800 million.

It was further alleged that Duke Oil Company (a 100 per cent subsidiary company of NNPC) was brought in as a middle player to protect some of the local companies being used in the deal.

However, the NNPC in a presentation at the Public Hearing stated that the crude oil-refined products exchange agreement with Duke Oil Company started in February 1, 2011. PPMC allocates 90,000 barrels of crude oil to Duke Oil Company in exchange for the delivery of refined products equivalent to value of the Crude Oil.

According to NNPC Duke Oil Company operates and manages the swap arrangement my loading three cargoes through its nominated operators Messrs Aiteo Energy Resources Ltd, Ontario Oil and Gas Ltd and Taleveras Group. Each company handles 30,000 barrels of crude oil per day.

The Public Hearing continues today.

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

%d bloggers like this: