MRS debunks expropriation of product throughput claims


Oscarline Onwuemenyi

29 March 2017, Sweetcrude, Abuja – The management of MRS Oil Nigeria Plc has debunked claims by the Nigerian National Petroleum Corporation (NNPC) that it expropriated the products placed under throughput or stored over a given period in its terminal.

In a statement made available to reporters, yesterday, the firm said the national oil company exhibited a misrepresentation of the workings and processes of the downstream operations, adding it was unfortunate that NNPC “chose to repeatedly distort facts and malign the integrity of the company.”

“For the sake of clarity, MRS is not a storage company, rather it is a throughput company. It is important at this point to explain in layman’s terms what throughput means. Throughput is akin to a banking arrangement.

“In a throughput contract, we act as a product bank to different customers who we throughput products for, but because of the operational process involved in replenishing stock, we have seven days from when we receive the demand to provide the products if we have stock out. This act of storing the products in a co-mingled state where products belonging to various customers are mixed and loaded out on demand is called throughput and is usually for a 30-day period.”

“We entered into a throughput agreement with NNPC Retail on 30th November 2016. In line with standard industry practice, the terms of the agreement stipulated that product would be stored in our tanks co-mingled with products belonging to us and any other client of ours and would be delivered to NNPC or any of its designated company within seven days of demand.

“In line with this agreement, NNPC Retail, a subsidiary of the corporation, brought a vessel named MT Undine with (40,637,355 liters) 29,000mts which berthed at our terminal on the 8th of December 2016 and 19 days after vessel discharge, no one from NNPC had shown up in our office to request to load out the products. We were constrained to send an email to the NNPC demanding that they come and load out their products because we had other vessels waiting to berth and were incurring demurrage.

“On the 30th of December 2016, nearly a month after the vessel discharged in our facility, NNPC officials, bowing to our pressure, finally appeared to familiarise themselves with our loading procedure. Between 30th of December 2016 and 14th of February 2017, NNPC only managed to load out 10,616,685 litres which is an average of eight trucks per day, as against our daily load out of 300 trucks.

“On the 4th of February, 2017, we received an email from NNPC Retail, saying they had loaned their products to Petroleum Products Marketing Company (PPMC) and as such we should load their remaining products to PPMC. It is important to point out here that PPMC, another subsidiary of the NNPC, also throughput products with us and were loading within the same period.”

This refutal comes on the heels of the Corporation’s confirmation that another company caught in the web of the Crude oil Swap arrangement, Aiteo Group had offset its debts, totaling $202.345 million. The corporation confirmed the development in a statement by its Group General Manager, Public Affairs, Mr. Ndu Ughamadu.

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