Oniwon told the House of Representatives ad-hoc committee investigating the refined product agreement between NNPC, PPMC and the oil companies that he obtained approval from the former minister for the trading of the 445,000 barrel per day crude allocated to the three refineries in the country, adding that only 150,000bpd was approved for the oil swap arrangement.

Nigerian Extractive Industries Transparency Initiative, NEITI, in its 2009- 2011 and 2012 reports had raised the alarm that the nation lost $8 billion due to discrepancy between the value of the crude oil given out and the refined products delivered. In his testimony before the ad-hoc committee led by Zakari Mohammed, Oniwon said though his approval threshold as GMD was $10 million and that of the minister N100 million, NNPC signed the agreement because the minister approved it. Explaining why he entered the contract without FEC approval, Oniwon said: “We do not require FEC approval.

The approval was obtained from the minister to do this business.” Speaking further, the former GMD, who was in charge from May 17, 2010 to June 26, 2012, disclosed that when he assumed duties, NNPC was insolvent as declared by the then Minister of State for Finance, Remi Babalola, with the Corporation having a debt of over $3 billion hanging on its neck. He said it was due to the huge debt burden that NNPC, under his leadership, deployed the cashless policy of product exchange in order to defray the liability. He said: “Our cash flow was in trouble and we couldn’t service the Federation Account and our suppliers. “As management, when you are cash-strapped, you look for cashless system available.” According to him, NNPC was paying for the 445,000bpd crude oil for the refineries, out of which 150,000bpd was approved for swap arrangement.

The committee, however, argued that before the ministerial approval was officially obtained, some of the companies involved in the swap agreement, notably Duke Oil and Trafigura, had lifted crude worth $24 billion with no contractual agreement. But the former GMD said the former minister actually approved extension of the contract. Chairman of the committee, Mohammed, disclosed that about $27 million taxes and levies were owed by the companies involved in the crude oil swap within the period under review. He also disclosed that all the contractors/companies involved in the deal were under obligations to pay all taxes and levies to government in the course of executing the contract as stipulated in Article 15 of the agreements signed by both parties.

— Feb 17, 2016 @ 7:51 GMT

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