The Nigerian National Petroleum Corporation (NNPC) on Tuesday described as baseless and faulty, the Berne Declaration report linking it with several crude oil infractions.
Speaking during a presentation before the House of Representatives Joint Committee on Petroleum Upstream, Downstream and Justice on the investigative hearing of alleged connivance of NNPC with Swiss oil dealers to rob Nigeria of billions of dollars, Group Managing Director of the NNPC, Engr. Andrew Yakubu maintained that the corporation’s crude sales pricing strategy is in consonance with international best practices.
Yakubu stated that NNPC’s prices are indexed to international North Sea grade dated Brent, which prices are published industry magazines, Price Reports, Platts, Petroleum Argus and London Oil Reports (LOR) which can be subscribed to by any interested persons or groups.
Responding to the Berne Declaration Report’s allegation of sale of 36 per cent of total federation crude oil to Vitol and Trafigura, Yakubu said NNPC’s records indicate that Vitol and Trafigura account for 30.7 million barrels out of the total 341.07 million barrels disposed by the Corporation in 2013 lifting.
“The lifting of Trafigura and Vitol in 2013 represents 9 per cent of the total lifting as against 36 per cent reported by the Berne Declaration. Additionally, Nigerian traders collectively account for 98.2 million barrels or about 29 per cent during the same period”, he said.
“Contrary to the report, selection of buyers of Nigerian crude is done on a transparent and competitive basis that seeks to establish financial and technical capabilities, promotion of Nigerian Content and general quality and safety assurance”.
According to him, the selection of traders has standard criteria that evaluate buyers’ facilities, volume of transactions, turn over and financial health of the companies, which is applicable to all, including Vitol and Trafigura. He added that the 2012/2013 Term Contracts have a preponderance of Nigerian trading companies with 23 out of the 40 regular buyers.
On the allegation of sale of un-utilised crude oil at knock down prices to Swiss companies through the crude oil product exchange, Engr. Yakubu explained that the NNPC Act mandates the Corporation to supply petroleum products to the federation as supplier of last resort. He further revealed that to meet this obligation, 445,000 barrels of crude oil is assigned to the Corporation at international price for domestic refining.
“The ‘Swap Arrangement’ referred to by the Bernes Declaration is a known practice in the industry where equivalent value of product is exchanged for crude oil offtake”, he said.
“This is a typical procurement strategy for supply constraint but resource dependent nations to hedge for supply security challenges. There is no value loss to the federation”.
The NNPC helmsman observed that contrary to the claim by the report that NNPC does not sell directly to the international market, Duke Oil and other NNPC affiliated trading companies participate in the disposal of Nigerian crude oil and account for 24 per cent of the total disposals.
Earlier in his opening remarks, Chairman of the Joint Committee and Chairman of the House of Representatives Petroleum Committee Upstream, Hon. Muraina Ajibola had assured that the committee would undertake the investigative hearing with every sense of responsibility.
The Crude Oil Marketing Division of NNPC and Duke Oil, an affiliate company of NNPC also made presentations to the Committee.
In its 2013 report, the Berne Declaration, a Swiss non-governmental organisation, had alleged that NNPC was conniving with Swiss Companies to short-change Nigeria of several billions of dollars.
Also on Tuesday, NNPC Spokesman, Dr. Omar Farouk Ibrahim reassured Nigerians of ample fuel supply, dismissing rumours of possible increase in pump price of premium motor spirit.
He said to the best of NNPC’s knowledge, there are no plans by the Federal Government to hike price of fuel. It also urged motorists not to indulge in panic buying, as there is enough fuel to last the country for several weeks.
“The re-emergence of long queues are the result of hoarding by owners of filling stations in vain anticipation of fuel price hike”, he said, imploring filling station owners to refrain from hoarding in order to help lessen long queues.
NNPC also urged marketers who have being loading petrol from their various depots not to hoard the product, as erring marketers will be sanctioned for such sharp practices.
