Aiteo confirms NEITI report on crude oil swaps

NNPC-Towers27 March 2014, Abuja – One of the indicted companies in the alleged connivance of the Nigerian National Petroleum Corporation (NNPC) with oil traders, Aiteo Energy Resources Limited, yesterday admitted that the differences observed in the audit report of the Nigeria Extractive Industries Transparency Initiative (NEITI) were due to a 30-day lag in the delivery of the petroleum products.

NEITI, in its audit report submitted to the National Assembly, accused four of the oil companies of under-delivering 500,075,239.3 litres of products worth $8 billion in year 2011.

They are 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).

On his part, Mr. Nnamadi who represented Aiteo Energy Resources admitted that the differences were due to the 30-day lag in delivery of the petroleum products.
He further explained that the company lifted a total of 10,231,122 barrels of crude oil valued at $1.170,732,027.62 and supplied refined products worth $1,111,972,698.18.18 in year 2011.

He added that “at the last reconciliation exercise with PPMC, Duke Oil/Aiteo Energy Resources Ltd had lifted 26,425,738 barrels of crude oil from 2011; valued at $3,010,308,113.08 and supplied refined products valued at $2,976,663,203.01” as at June 2013.

Nnamadi added that the value of the demurrage expense incurred by Aiteo Energy Resources Ltd from 2011 to June 2013 and reimbursement by PPMC was $60.269 million.

He maintained that Aiteo is fully a Nigerian company not a Swiss company and has no operations in Switzerland as alleged, stressing that the company’s dealings with NNPC remained responsible and that there was no attempt by the company to defraud NNPC or the Federal Republic of Nigeria.

However, Ada Ugo-Ngadi, Managing Director of Ontario Oil and Gas Limited, who also testified before the joint House Committee on Petroleum Upstream and Downstream and Justice failed to justify the quantity of crude oil lifted against the refined products supplied during the period under review.

Ugo-Ngadi, according to the document made available to the committee narrated her ordeal while in the custody of the Economic and Financial Crimes Commission (EFCC) on the oil deal.

Ugo-Ngadi noted that “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 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.”

While expressing displeasure over her submission, the committee mandated her to submit comprehensive documents on the volume of crude oil lifted and contract agreements signed with other partners; date and cost of products lifted as well as the vessels involved.
She was also directed to submit a list of relevant agencies which authorised the transaction and the terminals.

Other government agencies summoned to the investigative public hearing are the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Central Bank of Nigeria (CBN).

However, the committee before adjourning the hearing, summoned Minister of Petroleum Resources, Diezani Allison-Madueke to appear before the committee to explain the role of her office in the multi-billion dollar scandal.

In his submission to the committee, the CBN in a three-page letter dated March 24 and signed by the Deputy Governor (Operations), Kingsley Moghalu, explained that “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 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. Also, CBN cannot ascertain how NEITI derived these average rates.”

While ruling, the Chairman, House Committee on Petroleum Upstream, Muraina Ajibola, said: “I have not heard anything from her (minister). We will give her a date to appear before us and that will be the last.”



– This Day

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