The Nation Newspaper

Tag: Oil swap

  • Don’t link Okunbo to oil swap deals, says Owie

    One-time Senate Chief Whip Roland Owie, at the weekend, defended the business integrity of Chairman of Ocean Marine Solutions Limited Captain Hosa Okunbo.

    He condemned “satanic false reports’’ in some online media on Okunbo’s likely involvement in the controversial Offshore Processing Agreements (OPAs).

    A former Minister of Petroleum Resources, Mrs Diezani Alison-Madueke and two of her associates – Jide Omokore and Kola Aluko – were named by the United States Justice Department as persons of interest in a civil complaint reportedly filed at a District Court in Houston, Texas.

    The complaint, according to reports, detailed how Omokore and Aluko laundered millions of dollars for Alison-Madueke, to buy property in the U.S. and the United Kingdom in return for oil contracts.

    Owie said in a statement that he can vouch for Okunbo’s uprightness, noting that the malicious reports were calculated to cast a doubt on his reputation.

    He hoped such a negative enterprise at demonising Okunbo will fail, saying the business mogul is “God-fearing, law-abiding and a due process-adhering citizen.”

    “As a Bini socio-political and cultural leader, it behoves me to speak up for Captain Okunbo, who I know very well as a thoroughbred Bini man  and to call on those who have constituted themselves into faceless campaigners of calumny against him to desist from such odious acts.

    “Satanic agents who pursue innocent people out of envy should leave Captain Okunbo alone to do his business as a bonafide citizen of Nigeria as long as he operates within the ambit of the law and to dissipate their energy on something else.”

    Owie described Okunbo as “a worthy ambassador of the ancient Bini Kingdom and Nigeria,” who will always enjoy the goodwill of well-meaning Bini people.

  • Oil swap: Reps caution Kachikwu

    Oil swap: Reps caution Kachikwu

    The House of Representatives has expressed reservation over the capacity of the present managers of the nation’s oil and gas industry to reposition the sector.

    The lawmakers’ position followed the failure of the Minister of State for Petroleum Resources and Group Managing Director (GMD) of the Nigerian National Petroleum Corporation  (NNPC), Ibe Kachikwu to provide satisfactory answers to questions during an ongoing investigation on oil swap arrangement.

    The Minister drew the anger of the Committee following his repeated attempt to evade questions with vague answers on how beneficial was the oil swap arrangement.

    The Committee also asked the Minister to inform it on the extent due process was adhered to during the bidding process, in addition to what might have led to the circumstances that determined the agreements at the time.

    The Committee however lost its patience with the Kachikwu, when he asked his surbodinates not to commit themselves to figures they were not sure about when responding to Committee questions.

    The Minister was reminded that he was on oath and needed to take responsibility, even as he was new on the job, that his posture might not help the Committee in its assignment.

    He was also told that he has the advantage of subordinates at his disposal to assist in furnishing him with necessary information rather than put the Committee on a tight spot.

    Kachikwu, who disclosed that the country has stopped paying subsidy for fuel from paying over N1 trillion in 2015, however insisted that he could only offer what he was sure of, saying “I was invited here without adequate preparation and without notes.

    “There is nothing I have said here that does not show cooperation. Being under oath, I won’t give you what I don’t have facts about, what I expect you to ask from us are documents that we can provide later that will assist this process.”

    He later assured the Committee of his cooperation in the investigation.

    At this point, the Committee reminded him that the invitation letter was explicit about the issue on the table.

    The Committee however mandated the Federal Inland Revenue Service (FIRS) to find out whether a Netherland company, Trafigura Ltd, a non-resident oil trading company complied with Nigeria’s tax laws having lifted 12.5 million metric tons of crude oil in the swap arrangement without paying relevant taxes.

    The Committee was surprised that Nigerian companies that were involved in the same arrangement paid their taxes while a foreign company would prefer to short change the country where it was doing business.

  • Oil swap deal: Aiteo’s, Ontario’s MDs risk arrest

    • House praises Taleveras

    Following the refusal of two firms involved in crude oil swap arrangement with the Nigerian National Petroleum Corporation (NNPC) to appear before an investigative hearing, the House of Representatives has threatened to issue bench warrants for the arrest of their chief executives.

    Aiteo Nigeria Ltd and Ontario Nigeria Ltd entered into a contract with the Petroleum Products Marketing Company (PPMC) to return refined products in exchange for 30,000 barrels of crude oil from PPMC through Duke Oil, a subsidiary of NNPC.

    The chief executives of the two firms however failed to appear before the Zakari Mohammed-led ad hoc committee investigating the contract yesterday.

    Instead, a lawyer,  Chika Onyebuchi Uko represented Aiteo.

    Chika told the committee that her clients would not appear because there was a case against the sitting of the committee.

    “My clients will not appear because there is a case in court against this sitting. For my clients to come and make presentation would be prejudicial. My clients will not come until that case is dispensed with,” she told the committee.

    When the  committee asked her to present a copy of a restraining order against the investigation, Uko could not.

    The committee chairman told her the futility of that move, saying the House is constitutionally empowered to embark on such investigations.

    He said it was unpatriotic for her to attempt to truncate investigations aimed at exposing corruption.

    Mohammed said: “It is clear that you are misleading your clients from your presentation.

    “Is it because of the money you want to make that you’re jettisoning due process? As a legal practitioner, you know these step you are taking is wrong.

    “Ask your chief executives to appear within 48 hours and if they fail to appear, a bench warrant would be used to arrest them,” he said and banged the gavel.

    Speaking to reporters later,  Mohammed said: “Two companies that were in a contract with Duke Oil, Aiteo and Ontario appeared before us through their counsel that the hearing cannot continue.

    “We however made it clear that we are constitutionally empowered to do this. We also made it clear that the chief executives of the two companies must appear before the committee

    “We have formally summoned them to appear next Tuesday and if they fail to do tso, by Wednesday, we will inform the IGP(Inspector General of Police) to effect the bench warrant for the arrest of the chief executives of the two firms.

    “We have the bench warrant already. This is a national assignment and we can not allow it to be derailed; we are serious with the assignment given us by the House.”

    On the third trading firm, Taleveras Nigeria Ltd,  Mohammed said the company honoured the invitation.

    He said: “Taleveras have been coming since the commencement of the hearing. They were here today as well but went to the former hearing room but before we left the new hearing room, their representatives met us. They will be taken on Tuesday.”

    Mohammed said the committee will begin the investigation of marketers soon.

    He said: “By way of getting back, we have started our assignment and taken on a number of agencies. We are to dovetail and zero in on the marketers.

    “According to the PPMC, which deals with product marketing, most of the swap activities were carried out by oil marketers.”

  • Oil swap not cause of refineries’ failure, says NNPC

    The Nigerian National Petroleum Corporation (NNPC) has debunked reports attributing the failure of the refineries to the its crude oil Swaps and Offshore Processing Agreements (OPAs).

    The crude oil Swaps and Offshore Processing Agreements (OPAs) are arrangements made by the Federal Government in which crude oil is exchanged for refined product, or crude oil taken overseas for refining by oil trading companies, and NNPC pays the refining and other incidental costs.

    A source at the NNPC who spoke to The Nation on the issue, said it is important to set the record straight in the light of the unverified reports. “The reports are well-coordinated agenda aimed at creating new layers of distraction to cover up decades of political intrigues, corruption and sabotage, which have put paid to all attempts to revamp the four refineries.”

    The source said the history of the nation’s refineries had been dogged by social, political and systemic failures, which had defied solutions in spite of efforts by past administrations. “Our refineries have a history that is known to all. Attributing the failure of the refineries to the Swap and OPA contracts, which only emerged some four years ago, is the height of falsehood.”

    According to the source, the refineries woes began when the administration of the late General Sani Abacha awarded the controversial Turn Around Maintenance (TAM) contract of the Port Harcourt Refinery and Petrochemicals Company to a prominent politician and businessman. The contract was criticised and it led to major labour disputes. From that point on, successive governments have spent billions either carrying out ineffective TAMs or inconclusive privatisation attempts, he added.

    “The woes of the refineries were further compounded by the insurgency that erupted in the Niger Delta with militants regularly blowing up crude pipelines, especially the Kaduna refinery line. The rampart insecurity in the region gave rise to widespread vandalism on crude and product pipelines resulting in a booming illegal bunkering trade for arms business, incessant refinery shutdowns and well documented fatal fires that took the lives of hundreds of ordinary citizens,” he said.

    The source also said former President Olusegun Obasanjo was frustrated by the inability of the refineries to operate effectively despite pumping in millions of dollars to revamp them. Tired of fighting militants and chasing illegal bunkering moguls, he attempted to privatise them but the exercise was hijacked, only to be carried out at the final days of his administration.

    When the late President Umaru Yar’Adua came on board, he reversed the TAM contract on the Kaduna and Port Harcourt refineries awarded it to a local oil consortium because the process was considered not to be transparent.

    From that moment, none of the refineries has functioned effectively.

    Because of this development, advocates of deregulation and private refineries have been sabotaging the government’s efforts at restoring the refineries in order to have their way. Therefore, blaming the oil Swaps and OPA for the failure of the refineries to function is mischievous. The oil Swaps and OPAs were introduced as a solution to steady fuel supply because of non-operational refineries and should not be the reason the refineries are not working, he said.

    The initial crude swap deals occurred between 1977 and 1986 when heavy crude from Venezuela was swapped for Nigeria’s light crude to feed the Kaduna refinery. Because of the state of the local refineries, the government extended the crude swap concept to include crude for refined products.

    The decision to deploy Swap and OPA contracts for reliable and sustainable supply of products was done in the best interest of the nation, and is one of the reasons Nigeria has survived various periods of fuel scarcity that would have grounded the economy. The terms of the Swap and OPA contracts were transparent and had in-built robust clauses, which have made it possible for all parties to reconcile their position amicably, the source added.

     

     

     

     

     

  • Oil swap deal: ‘AITEO not involved in $150m fraud’

    Oil swap deal: ‘AITEO not involved in $150m fraud’

    The management of AITEO Group has denied involvement in any $150 million shady deal in crude oil-for-refined-products-exchange programme.

    The firm’s clarification came as the Economic and Financial Crimes Commission (EFCC ) intensified investigation into the alleged oil-swap scandal in the petroleum sector.

    AITEO said it has submitted relevant documents to the EFCC and the Department of State Security Service (DSS) to prove that its crude oil-for-refined-products-exchange programme had been transparent

    The EFCC recently started investigation into how the Federal Government was allegedly short-changed by the Nigerian National Petroleum Corporation (NNPC) in swapping crude for refined products.

    The company, in a statement in Abuja by its spokesperson, Miss Aiki Odiawa, said it had never acted as a front for former President Goodluck Jonathan and ex-Minister of Petroleum Resources Mrs. Diezani Alison-Madueke.

    It said its transactions with NNPC required quarterly reconciliation to determine all crude oil loaded and refined products delivered.

    The statement read in part: “Executive Management of AITEO makes reference to three publications of April 28, 2014, June 10, 2015; and June 7, 2015 (Oil Traders, NNPC Officials Interrogated, watch-listed in Major Investigations) in which spurious allegations were made about the company and one of our founders, Mr. Benedict Peters.

    “Without prejudice to any legitimate fact-find process lawfully authorised by Nigerian authorities, as a corporate entity whose success has been as a result of dynamism, foresightedness and fortitude, it is pertinent that clarification is made to the general public on the position of AITEO.

    “AITEO in collaboration with Duke Oil participated in both the SWAP crude oil-for-refined-products-exchange programme and Offshore Processing (OPA) Agreement, which are both governed by robust legally binding agreements with provisions for strict commercial considerations backed by the necessary financial instruments to mitigate and manage potential risks of transactions of this nature.

    “AITEO’s participation in the programmes was premised upon AITEO having fulfilled all requirements precedent to being nominated and gaining the objective confidence of the Management of NNPC on its strong competence and ability to deliver on the said contracts as and when due.

    “Never at any point has AITEO unfairly exploited its commercial relationship with NNPC under the SWAP or OPA contracts.

    “Further allegations that AITEO was more than 20 cargoes in arrears on the new deal are completely false.

    “In fulfillment of our outstanding obligation on the Duke Oil SWAP and contracts, we have decided to nominate two cargo deliveries to fully liquidate any outstanding deliveries due to PPMC.

    “However, should there still exist a deficit after reconciling positions, where there is an over delivery, PPMC will issue a credit note in favour of AITEO and if AITEO should have any outstanding, this will either be deducted from on-going cash calls due AITEO from AITEO/NNPC Joint Venture or an outright remittance as the case may be.

    “The Board of AITEO has taken the decision to wind down this Duke Oil SWAP and OPA contract promptly and bring its business relationship with Duke Oil to a closure.

    “It should be noted that AITEO’s OPA with NNPC requires a reconciliation meeting to take place between the parties on a quarterly basis for all crude oil loaded and refined products delivered.”

    The statement added that a reconciliation meeting has been scheduled to ascertain what each party has delivered so far.

    “In light of this development, the fully reconciled position should be determined soon.

    “Therefore allegations that AITEO ‘apparently gulped down $150 million’ are not only baseless but aimed to slur the name of the company,” the statement added.