A damning report lifts the veil on how state
oil
company, NNPC, is joining forces with
foreigners to
steal crude oil, robbing Nigeria of billions of
dollars.
—————————–
The process by which the Nigerian National
Petroleum Corporation, NNPC, selects trading
companies to which it sells Nigeria’s crude
oil is
characterised by monumental corruption and
intense
uncertainty. A report has likened the
arrangement to
a “beauty pageant.”
In some instances, according to the report,
the NNPC
collude with foreign companies to facilitate
the
stealing of Nigerian crude with firms without
allocations lifting oil from the country’s
shores.
The report, “Big Spenders: Swiss Trading
Companies,
African Oil and the Risks of Opacity,
published by
Bern Declaration, BD, a Switzerland-based
non-profit
transparency organisation, examined the
processes
involved in the sales of crude oil to Swiss
commodity
trading companies by SubSaharan African
countries
between 2011 and 2013.
The report was co-authored by another Swiss
NGO,
Swissaid, and an American one, the Natural
Resource
Governance Institute (NRGI).
The report observed that Swiss companies
purchased
over 500 million barrels of crude valued at
$55
billion from 10 sub-Saharan African
countries within
the period under review. According to BD, the
figure
“equal(s) 12 percent of the governments’
revenues,
and are double what they received in foreign
aid.”
Pointing out that Swiss trading companies
are the
largest buyers of crude from Cameroon,
Chad,
Equatorial Guinea, Gabon and Nigeria, BD
states that
these purchases are subject to governance
risks
because “they take place in environments of
weak
institutions and widespread corruption”.
In Nigerian, for instance, BD puts the value of
crude
sold to Swiss trading companies at $37
billion which
makes up more than 18 per cent of total
government
revenue in the period under review.
It observed that unlike most major crude
producers
around the world, which prefer to sell crude
directly
to refineries and end users, the Nigerian
National
Petroleum Corporation, NNPC, sold over a
third of
Nigeria’s crude between 2011 and 2013 to
Swiss
companies alone.
“In 2011 and 2012, Swiss companies bought
almost
half of the identified export sales made by the
Nigerian National Petroleum Corporation
(NNPC), an
estimated $27 billion worth of crude. While
this
figure dropped to a little less than one third
in 2013,
as Nigerian companies became bigger
buyers, Swiss
companies still bought government crude
worth an
estimated $10 billion,” the report stated.
“Beauty Pageant”-type process
According to BD the annual term contract
through
which the NNPC selects companies that are
eligible to
buy crude is so skewed by favouritism and
corruption
with its criteria for selection so opaque that it
could only be likened to the process of
selecting the
winner of a beauty pageant.
The report states that many of the trading
companies
on the list are allowed to lift far more that
the
quantity they are officially allotted.
“In 2012, Vitol and Trafigura each received
term
contracts worth 30,000 barrels per day. Each
of the
companies also operates its own oil
marketing joint
venture with NNPC (both based in Bermuda:
Calson for Vitol and Napoil forTrafigura), and
these
entities each received additional 30,000
barrel per
day allocations that year.
“However, rather than 60,000, market data
suggests
that Vitol bought closer to 145,000 barrels
per day in
2012, and Trafigura 97,000—far exceeding
their
allotted shares, and a discrepancy that
illustrates the
laxity of the system.”
In fact some companies, which do not appear
on the
award list, are allowed to lift crude.
Particular
mention was made of Swiss firm, Arcadia,
which
lifted 19 cargoes between 2011-2013 despite
not
being approved to lift crude.
“Nigeria’s award of the term contracts is a
discretionary and politicized process, with
companies
gaining and losing allocations depending on
their
relationship with the officials in charge and
the influence of their local contacts or
‘sponsors,” the
BD report states.
http://m.premiumtimesng.com/
news/165303-how-nnpc-is-colluding-with-
swiss-traders-to-steal-nigerias-crude-
oil.html