By Iheanacho Nwosu
FRESH twists at the weekend emerged in the controversies dogging the $24billion crude oil swap transactions between 2011 and last year, a period when embattled Mrs. Diezani Alison-Madueke held sway as minister of petroleum resources.
Contrary to a recent claim that there was no contractual approval for the deals, Daily Sun learnt revealed that the leadership of the Nigerian National Petroleum Corporation (NNPC) sought and got approvals for the transactions.
A former Group Managing Director (GMD) of NNPC, Mr. Austin Oniwon, recently told a House of Representatives ad hoc Committee on Crude Oil Swap headed by Zakari Mohammed that there was no formal contract between the corporation and trading companies that lifted the $24billion crude oil from the country between 2011 and 2014. He claimed that Mrs. Alison- Madueke merely granted the “extension” of an earlier contract. According to him, the extension was not a formal contract before he (Oniwon) left office in 2012.
Similarly, another former GMD, Mr. Andrew Yakubu, told the committee that he was frustrated out of office because he complained of the anomalies. Oniwon and Yakubu’s claims were swiftly countered by Mrs. Alison- Madueke, who is currently receiving cancer treatment in London.
However, some documents on the swap deals have presented a totally different picture from the ones presented by Oniwon and Yakubu. The documents revealed that past leaderships of NNPC sought and got Alison- Madueke’s approval for the renewal of the contracts of three organisations that were involved in the transactions.
The companies are Trafigura Beheer BV, Society Ivoirienne de Raffinage (SIR) and Duke Oil. Their contracts expired in 2013 and were renewed in 2014 On August 5, 2011, Oniwon, in a memo entitled: “Renewal of offshore processing agreement with Messrs Societe Ivoiriene De Raffinage (SIR), sought the approval of the minister to extend NNPC ‘s contract with SIR. The request was approved.
Part of the memo read: “The crude oil processing agreement between NNPC and Societe Ivorienne Reffinage (SIR), which started on October 8, 2010 will expire October 3. The contract is for the allocation of 50,000 b/d of various Nigerian crude oil grades to be processed at the refinery and supply of petroleum products to NNPC.” The board was to ratify the contract.
Another document also indicated that Duke Oil, which is a subsidiary of NNPC, was given approval for a one year term in January 2011. The two approvals were sought by the GMD. The contracts, going by the documents, expired in 2013 resulting to other requests for renewal.
Yakubu, on January 10, 2013, wrote Alison- Madueke asking for the renewal of contract between PPMC and Trafigura Beheer B.V.
The memo entitled, ‘Re: Assignment of crude Oil/Refined product swap contract between PPMC and Trafigura Beheer B.V,’” read in part: “ the Honourable Minister is kindly invited to refer to the attached letter From Trafigura Beheer B.V (Trafigura) referenced 2013 MS/RG L5042 and dated December 19, 2012. In their referenced letter, Trafigura is requesting that the swap contract be issued in the name of Delaney Petroleum
Ltd (Delaney) with whom they have strategic commercial association being made in 2014 by the corporation’s then GMD.
“The Honourable Minister will recall that an approval was given for the extension of the swap contract for a further term of two years after the expiration of the original term of one year. The renewal swap contract has not yet been executed by the parties and consequently there is no agreement in place for this transaction.”
The volume of contract given to Trafigura, according to the memo, was 60,000/ day.
On August 29, 2014, then GMD of NNPC, Joseph Dawha, in a two- page memo addressed to Mrs. Alison-Madueke, requested for her approval for the renewal of swap contracts. It was entitled “Re: Renewal of Offshore Processing Agreements (OPA) and Crude Oil Product Exchange (SWAP) Contracts”.
Dawha’s memo sought to ratify all three approvals earlier mentioned which had apparently variously expired during the course of 2013”.
“This memo purports to seek the approval of the Honourable Minister of Petroleum Resources for renewal of the OPA/SWAP contracts. The contract was initiated to solve the perennial burden of petroleum products scarcity that bedeviled the nation in 2009/2010 following the reluctance of other marketers to complement the effort of NNPC as the supplier of last resort arising from the challenges militating against prompt settlement of subsidy to eligible claimants by the Ministry of Finance.”
In a bid to clear her name in the controversies trailing the claim that there was no contract for the swap deals, Mrs. Alison-Madueke last week refuted the allegations that she extended the agreement instead of renewing contracts for the transaction.
She had explained that the lapses between expiration and renewal dates were seven months for Duke Oil, 10 months for SIR and 12 months for Trafigura, insisting: “Secondly, on the 28th of October 2014, following the recommendation of the then GMD, NNPC, the minister approved OPAs for a new term of two years commencing from January 1, 2015. The entities recommended by NNPC were Sahara Energy Resources Ltd, Aiteo Energy and Duke Oil. NNPC strongly recommended and outlined the benefits of the OPA over the SWAPs and put forward the case for migration from the OPA and crude exchange (SWAP) contracts to OPAs fully. NNPC posited that the ‘experienced benefits of the OPA to the Federation,’ would be much greater. All approvals were due process- driven and were only given by the Minister following formal statutory written requests, which contained the technical basis for the renewal and were sent to the Minister by the GMD- NNPC, as is the normal practice.
“NNPC had clearly requested for the approval of the Minister for “Renewal of the Crude Oil – Refined Products Exchange Agreement” and “Renewal of Offshore Processing Agreement” on all the various occasions. Whereas, it is the Minister’s responsibility to either give or refuse approval, it was not within purview of the minister to draft, initiate or conclude the processes of signing the final contracts as it is the statutory responsibility of NNPC to ensure that all technical areas are duly covered and all requisite due process parameters are duly implemented.”