 |
NNPC, Abuja, FCT
|
Another chapter was yesterday opened in the probe of the
multi-billion dollar crude swap that cost Nigeria so much cash and delivered
little fuel — in some cases. The probe of the Nigeria National Petroleum
Corporation (NNPC) contracts has extended to the managing directors of the four
troubled refineries. They are being quizzed in Abuja by security agents, who
are eager to get an insight into the allocation of crude to the refineries and
how crude was swapped, it was learnt last night.
The Nation report continues:
Those being questioned to
ascertain how they have been managing the crude allocated to the refineries and
what they processed are: Warri Refinery Managing Director Paul Obelley, Port
Harcourt Refinery Managing Director Fred Enjugu and Kaduna Refinery chief Saidu
Mohammed. They could not be reached for comments last night.
The investigation, which
began last month, was sparked by the need to arrest the huge cash lost through
opaque contracts in which crude oil worth billions of dollars is given to
traders in exchange for refined imports, mainly gasoline.
The Economic and
Financial Crimes Commission (EFCC) and the Directorate of Security Services
(DSS) launched the investigation last month.
A security source said
the DSS wanted to find out how the value of the crude and products was
computed.
“It appears that the
value of the crude was more than the value of the refined imported,” a security
source said.
The contracts, known as
offshore processing agreements (OPAs) are between Pipelines and Product
Marketing Co (PPMC), a subsidiary of NNPC and companies.
The NNPC last week
admitted that some of its officials were invited by security agencies “to shed
light” on the contracts.
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.
Some contract-holders
have said that the discrepancies in value were reconciled.
Product exchange (swap)
and offshore processing agreement (OPA) are transactions in which the NNPC
supplies the other party with crude oil in return for refined products for sale
locally on a value-for-value basis.
Under the Offshore
Processing Agreements (OPA), the NNPC provides crude oil to another party who
would refine the crude oil on behalf of the NNPC and return the refined
products to the Corporation based on the yield slate of the refinery. The NNPC
provides the crude oil and pays the refining and other incidental costs.
But an NNPC source said
last night that managing directors of the refineries were not involved in the
SWAP and OPA arrangements.
According to him, it is
completely between the oil traders and the government. He added that the swap
and OPA oil deals were created as a result of the poor state of the refineries,
adding that the refineries are now begging for supply of crude to enable them
produce.
He also explained that
because the refineries are down and the rule is that the NNPC must remit the
dollar value of the 445,000 barrels per day supply into the Federation Account,
the corporation sells the crude at international market price and remits into
the Federation Account.
“The Swap and OPA
arrangements were considered economically wise and beneficial to the government
in terms of value addition, that is why it was introduced,: the source added,
pleading not to be named because he is not allowed to speak.
The fear of a massive
purge after a probe of the activities of the NNPC has gripped top officials of
the oil giant.
The Deputy Group Managing
Director/Group Executive Director (Finance and Accounts), Bernard Otti has been
away abroad since the inauguration of the new government. Sources and he
is abroad for medical reasons.
Company Secretary/Legal
Adviser Ikechukwu Oguine resigned and paid three months salary to the
corporation in lieu of notice.
The four refineries
will resume production next month, according to NNPC spokesman Ohi Alegbe.
The commencement of
production by the refineries raises hope of an end to perennial petrol
shortages that have plagued the country, which though is Africa’s largest crude
producer, has been battling with a crippling fuel scarcity.
“The refineries at Warri,
Port Harcourt and Kaduna will resume next month after a successful
turn-around-maintenance (overhaul) of their facilities,” Alegbe told French
News Agency, (AFP).
“The
turn-around-maintenance has been on for some time. We did not just want to make
any noise about it. The refineries will start production as soon as they have
delivery of crude oil for refining,” he said.
Alegbe added that the
resumption of refinery activity “will significantly improve the supply of
petroleum products in the country.”
The NNPC has four
refineries — two in Port Harcourt, the Rivers State capital, one in Kaduna and
another in Warri, with a combined installed capacity of 445,000 barrels per
day.
A network of pipelines
and depots located throughout the country links these refineries.
Nigeria produces two
million barrels of crude oil a day, but has to export it due to a lack of
working refineries. It then imports fuel back into the country at international
market prices – a situation blamed on corruption and mismanagement.
To cushion the blow on
the general population, the government sells fuel on the streets at subsidized
prices, and makes up for the higher amounts spent by importers by reimbursing
them the difference — a system seen as rife with false claims and overpayments.
Last month, the fuel
shortage almost grounded Nigeria to a halt, as fuel importers and marketers
shut their depots to protest some $1 billion (900 million euros) in unpaid
reimbursements.
Black market and
legitimate petrol vendors did a brisk trade, selling at around N300 ($1.5; 1.3
euros) a litre — well above the officially-set price of N87.
In January 2012, the
government tried to end the subsidies, causing petrol prices to more than
double. It was ultimately forced to reinstate the payments after tens of
thousands of people took to the streets in violent protests that left more than
a dozen dead.
No comments:
Post a Comment