A Review of the Nigerian Energy Industry

Again, Reps summon Alison-Madueke over crude swap arrangements

Diezani alison madueke

27 March 2014, Abuja – The House of Representatives Joint Committee on Petroleum Resources (Downstream and Upstream)/Judiciary on Wednesday summoned the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, to testify in the ongoing investigation into crude oil swap arrangements and the alleged under-supply of refined petroleum products imported into the country.

The committee is also looking into alleged connivance between the Nigerian National Petroleum Corporation and Swiss trading companies to defraud Nigeria of billions of dollars of crude money.

The Nigeria Extractive Industries Transparency Initiative, had earlier in a report to the committee, named four firms it said under-supplied 500,075,239.3 litres of products.

The value of the loss was put at $8 billion in 2011.

Those listed by NEITI were Trafigura (173,786,600 litres); Vitol (654,440.7 litres); Taleveras (152,308,878 litres); Aiteo Nigeria Limited (193,046,590 litres) and Ontario Oil and Gas (180,278,732 litres).

Ruling on Alison-Madueke, the Chairman of the committee, Mr. Ajibola Muraina, said he had not received a comprehensive response from the minister despite inviting her earlier.

He added, “I have not heard anything from her.

“We will give her a date to appear before us and that will be the last.”

But, the Managing Director of Ontario Oil and Gas Limited, Ada Ugo-Ngadi, tried to justify the swap arrangement, though she did not answer questions on the quantity of refined products expected from each crude swap.
“Ontario’s swap arrangement with NNPC/PPMC is in line with international standard, transparent and complies with all audit requirements.

“It is transparent and conducted in line with global best practice.
“The publication (that Nigeria recorded losses) is a figment of the writers’ imagination seeking to distract Nigerians and cause distrust of indigenous oil companies.

“It is baseless, faulty and deserves no serious attention,” she told the committee.

However, the committee expressed dissatisfaction with her submission and directed her to produce more documents on the swap arrangement.

The Central Bank of Nigeria faulted the NEITI report, saying that the agency used the wrong exchange rates in arriving at its figures.

A letter the bank’s Deputy Director, Operations, Mr. Kingsley Moghalu, wrote the committee, read, “The average exchange rates presented by NEITI in its report to the National Assembly are not CBN quoted rates.

“CBN does not use average rate in conducting monetisation or any foreign exchange deal.

” Average rate is only a statistical information to indicate central tendency of data for research and policy direction purposes.

” CBN uses spot rate for oil receipts and monetisation transactions.

“The NNPC’s liftings of crude oil are normally received by the CBN into NNPC account three months after the liftings.

“The rates used during the year’s liftings cannot be the same throughout the year, hence the cause of the observed difference by the Honourable Committee.

“CBN cannot confirm the exchange rate used by the NEITI Audit as CBN Average Exchange Rate, since CBN uses the spot rate for the receipts and not an average.”


– The Punch

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