…Capital Oil owed N16bn by NNPC, says Ifeanyi Ubah
16 July 2017, Sweetcrude, Abuja – The Nigerian National Petroleum Corporation (NNPC) has insisted that embattled energy company, Capital Oil, and Gas Limited, is credit-worthy despite the N9.1 billion debt owed by the company.
The Executive Director in charge of Finance and Accounts, NNPC Retail, Mr. Ibrahim Juma Dansure, made this statement while speaking at the House of Representatives Committee investigative hearing of the alleged diversion of petroleum products.
The House Committee is investigating the alleged disappearance of 82 million metric litres of petrol belonging to NNPC stored at Capital Oil tank farm in Lagos state.
Dansure said negotiations were ongoing between the Department of State Services (DSS), Economic and Financial Crimes Commission (EFCC), corporation and the oil firm to ensure an effective payment plan.
He said Capital Oil has admitted to diverting 84.89 million litres of petroleum products belonging to NNPC without the Corporation’s approval adding that there was no basis to question the creditworthiness of the company.
The value of the diverted products was put at N11.14 billion at a rate of N131.28 per litre.
The NNPC official said there was no dispute about the volume of the products but both companies have not agreed on the actual value of the product.
While NNPC claims N131 per litre, Capital Oil alleges N120 per litre, with both sides accusing each other of breaching their contract.
NNPC said the company traded its oil without authorisation while the latter insisted that no clause in their agreement forbids it from tampering with products as long as it is made available when needed.
NNPC had earlier said Ubah returned N2 billion out of the N11 billion in question.
Chief Operating Officer of the Petroleum Pricing and Marketing Company (PPMC), Mr. Henry Nkem Obi, had told the House Committee on Wednesday that before the reported diversion of the petroleum products, the NNPC had an agreement with Capital Oil that no party tampers with any petroleum products consignment in its custody without the knowledge of the other party.
“We’ve since engaged in the process of negotiations for the defaulting party to return the products to the NNPC. Capital Oil has paid N2 billion and negotiations to get the full payment are ongoing,” he said.
However, Managing Director, Capital Oil, Dr. Ifeanyi Ubah, insisted that his company had not committed any crime, adding that the NNPC has been indebted to the company since 2015.
Ubah stated that the Corporation had blown the incident out of proportion.
According to him, “The contract which is what we operate with NNPC puts us in a position of a stock manager which is somewhat the vessel akin to an oil bank. This allows for coming in and loading out of products so long as we ensure that all parties having products in our storage ultimately receive their total stock.
“The NNPC in the past has also borrowed products from us to keep their supply and distribution chain running. NNPC claimed that we owe N11 billion but failed to reveal that they owe us N16 billion with a key portion of the debt spanning over two years.”
Ubah said although his company acknowledges that it has products belonging to the NNPC in stock, the corporation had failed to conduct a reconciliation with his company “before rushing into making allegations”.
“Everything we have done to this point is within the purview of the dynamics of the business practice in throughput storage management worldwide which has been in existence over the nine years of our business relationship with the NNPC,” he said.
“The contract allows us to use stock in our tanks so long as we are able to return our customers within seven days of their demand and therefore such activity cannot under any stretch of imagination constitute stealing or any crime whatsoever.
“Most unfortunate is the manner in which our mutual commercial issues were too quickly released to the media by NNPC without regards to the confidentiality of the transactions.”
He said the unjustifiable action of the NNPC has made his company lose goodwill and sack 200 workers as a result of its shutdown.
“For the avoidance of doubt, we wish to reiterate that we have committed no crime, rather it is the NNPC group that has committed a wrong by destabilising our company.”
Ubah had been arrested by the DSS on May 6 over the diversion of petroleum products. He was released after five weeks in detention.