Members of the Federal House of Representatives have disclosed that they will probe the crude oil exchange deals between the Nigerian National Petroleum Corporation, NNPC and its subsidiary, the Pipelines Product Marketing Company, PPMC between 2011 and 2015. The said deal that allowed the NNPC to exchange crude oil for refined petroleum products with the partnering company would be further investigated. The House Ad hoc Committee chaired by a representative from Kwara State, Zakari Mohammed of the ruling All Progressives Congress investigating the matter has disclosed that crude oil worth about $24bn was traded by the government owned NNPC with some crude marketing firms, including Duke Oil and Trafigura.
Mohammed has vowed that his committee would compel the Minister of Petroleum Resources to appear before the committee to clear the controversies that surround the issues. It remains to be seen if President Muhammadu Buhari who doubles as the Petroleum Minister would submit himself for questioning by the lawmakers. Mohammed said: “This is an investigation. The committee will invite the minister we know today. If the President cannot come, that is why there is a minister of state; Mr President can delegate him,” adding “Let the minister come and tell the committee that he knows nothing about the transactions because he was not the minister at that time.”
The committee had ordered the chief executive officers of the two oil firms, Ontario and Aiteo,to appear before it, failure of which they said would attract serious sanctions. The NNPC had on December 18, 2015 announced that it will award new crude for oil products swap agreements to Total, Varo Energy, Cepsa and ENI.
The deals that are expected to begin in February 2016, differ from the former “offshore processing” agreements. They are directly with refineries that can refine the crude locally for consumption in the country, although NNPC had announced that the nation’s refineries now refine over six million litres of petroleum product per day, Nigeria is still almost wholly reliant on imported gasoline, kerosene and other petroleum products while it exports some 2 million barrels per day (bpd) of crude oil.
Varo Energy is a joint venture refining company between global oil trader Vitol and private equity firm Carlyle Group. Cepsa, ENI and Total are all integrated oil companies with refineries in Europe. On the other hand, NNPC reached interim swap agreements in September with its trading subsidiary Duke Oil and NNPC joint-venture companies Calson, which is with Vitol, and Napoil, which is with commodities trader Trafigura.