• Wednesday, February 21, 2024
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NNPC denies conniving with Swiss firms to defraud Nigeria


The Nigerian National Petroleum Corporation (NNPC) on Tuesday debunked claims that the corporation connived with Swiss oil companies to defraud Nigeria.

Mr Andrew Yakubu, Group Managing Director of the corporation, made the denial at the investigative hearing on the alleged connivance of NNPC and Swiss oil companies to defraud Nigeria of billions of dollars.

The News Agency of Nigeria (NAN) reports that the allegation was made by Berne Declaration, a Switzerland-based non-governmental advocacy group.

The group alleges that Nigeria loses billions of dollars every year from large volumes of crude oil exported from Nigeria below the international market price.

It specifically mentioned Vitol and Transfigura Commodity Trading Firms of Switzerland in the shady deal with the NNPC.

Testifying before the House of Representatives Committee on Petroleum Resources (Upstream), Yakubu, however, said that the corporation’s pricing strategy was in line with international best practice in the oil industry.

“Our prices are based on a reference to the benchmark crude Brent which prices are published by Platts for the international community,” he said.

The NNPC boss said that the claim by Berne Declaration that Vitol and Trafigura oil companies accounted for over 36 per cent of total volume of crude oil disposed by the NNPC was false.

He said that contrary to the claim, Vitol and Trafigura accounted for only 30.7 million barrels out of the 341.07 million barrels disposed by the corporation in 2013.

“The lifting of Trafigura and Vitol in 2013 therefore represents nine per cent of the total lifting as against 36 per cent reported by Bernes Declaration,” Yakubu said.

He said that Nigerian traders collectively accounted for 98.2 million barrels during the period under review.

Yakubu told the committee that international traders, including Swiss trading companies, accounted for 61.2 million barrels, while off-shore and the Nigerian refineries took 36.2 and 38.3 million barrels, respectively.

He said that the selection of buyers of Nigerian crude was done transparently and competitively based on financial and technical capabilities.

Yakubu said that there had been significant increase in the number of Nigerian traders participating in the disposal of Nigerian crude.

He explained that the swap arrangement alleged by the Berne Declaration was a known practice in the oil industry

Yakubu said that the corporation delivered the international market value of crude to the federation on the basis of the general sales agreement and conditions.

He said that the NNPC Act mandated the corporation to supply petroleum products to the federation as supplier of last resort.

“In order to meet this obligation, 445, 000 barrels of crude is assigned to the corporation at international price for domestic refining,” he said.

The Chairman of the committee, Rep. Muraina Ajibola (PDP-Oyo), said that the committee would ensure that appropriate recommendations were submitted to the House.