- The Nigerian oil sector is always plagued with stories of financial improprieties
- Another major controversy is brewing in the industry
- Some unknown companies are said to be benefiting from the rot in the system
A report by Daily Trust indicates that some indigenous companies not registered by the Corporate Affairs Commission (CAC) have lifted Nigerian crude oil grades valued at N1.1 trillion in the last 10 months.
According to the report, a four-month enquiry into Nigerian and global corporate registries showed that the refusal by the Nigerian National Petroleum Corporation (NNPC) to provide accurate information of some companies it awarded oil lifting contracts this year is helping these companies to escape public scrutiny.
To make matters worse, the NNPC is already preparing for another round of award, as it had, in October, issued a tender seeking companies to engage in the lifting of Nigerian crude oil grades for the 2018/2019 term.
NNPC GMD, Dr Maikanti Baru has questions to answer concerning contracts awarded by the corporation. Photo credit: NNOPC
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On January 3, the NNPC announced 39 successful winners for its crude lifting contract that would run for 12 months. The announcement was followed by a release of the names of the winners to newsmen and in a post on its official website.
The names of the 18 beneficiary Nigerian companies were given as Prudent Energy; Setana Energy; Emo oil; Bono; Optima Energy; Shoreline Limited; AMG Petroenergy; A. A. Rano; Cassiva Energy and Arkleen Oil and Gas Limited. Others are North West Petroleum; Brittania-U; Hyde Energy; Eterna Oil and Gas; Masters Energy; MRS Oil and Gas; Sahara Energy and Oando.
Part of the mandatory pre-qualification requirement for the Nigerian companies that applied for the contract as requested by the NNPC was evidence of company registration issued by the CAC.
The CAC however said it had no evidence of the registration of seven of the 18 companies.
It listed AMG Petroenergy Limited, Brittania-U, Cassiva Energy, Hyde Energy, Masters Energy and Bono Energy Nigeria Limited as companies that didn’t exist on its database.
The NNPC, however, had in January 2017 replied a query on the matter, stating that it made the “difficult choice” not to publish the winners’ full names in an effort to protect them and “gullible buyers” from fraudsters.
Crude market and industry professionals, however, disagreed, saying that in an oil market commonly marred by fraud and illegal sales, precision around company identities is important.
“I believe transparency is a major challenge in the Nigerian business environment. It should be easy to know who the traders and shippers are and their qualifications to undertake the tasks,” said Emeka Duruigbo, a professor of Energy and Business Law at Thurgood Marshall School of Law, Houston, Texas.
“Corruption, ineptitude and inefficiency thrive in the midst of opacity,” Duruigbo, who has knowledge of the workings of the international oil market said.
The crude term sale contracts to companies, including those awarded the 18 Nigerian oil companies, are among the most significant deals the NNPC signs yearly because crude sales are government’s largest revenue stream.
When in January 3, the corporation announced successful winners for the contract, it also stated that all the companies (excluding Duke Oil, NNPC subsidiary), were to receive 32,000 barrels per day (b/d) of the Nigerian equity crude.
Consequently, about 67.2 million barrels of Nigerian crude may have been lifted from January to October 2017 by AMG Petroenergy Limited, Brittania-U, Cassiva Energy, Hyde Energy, Masters Energy, Bono Energy Nigeria Limited and Sahara, which are the seven companies that were not found in the CAC database.
The 67.2 million barrels of oil was arrived at after multiplying 32,000 barrels daily lifting by the seven companies for 10 months.
Market analysis shows that the NNPC sells the country’s crude share to the trading companies at a discounted price, when compared to Brent crude, the global crude benchmark.
There is no available public record that the companies made refunds to the government, but the NNPC continues to award oil lifting contracts to them.
Meanwhile, the National Association of Road Transport Owners (NARTO) and allied unions under the aegis of Petroleum Tanker Drivers (PTD) have promised to expose those sabotaging the smooth distribution of petroleum products in the country.
The groups made the resolve on Thursday, December 21, at a stakeholders meeting on the challenges of products supply and distribution led by the chairman, House of Representatives committee on petroleum resources downstream, Joseph Akinlaja.
The groups said their focus was to end the current hardship experienced by Nigerians at filling stations.
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Source: Naija.ng