Product of Poor Research

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Andrew Yakubu, group managing director, NNPC

The Nigerian National Petroleum Corporation has dismissed as poorly researched, a report credited to a Swiss-based NGO of sharp practices in the sale of Nigerian crude oil to international traders

|  By Anayo Ezugwu  |  Nov. 25, 2013 @ 01:00 GMT

THE management of the Nigerian National Petroleum Corporation, NNPC, has dismissed a recent report by the Berne Declaration, a Swiss-based, Non-governmental organisation, NGO, which accused the corporation of collusion with some local and international oil traders to execute unfair industry practices. The corporation denounced the report, saying it was poorly researched. Tumini Green, acting group general manager, group public affairs division, NNPC, said in a statement that the publication “is not only bogus but strewn with inaccurate data, which defies common sense and verifiable evidence on ground in Nigeria.”

“For instance, how can anybody who claims to be a close observer of the Nigerian oil and gas industry say that the process leading to the award of term contract for lifting of Nigeria’s crude is shrouded in mystery, when it is common knowledge that the call for tender for this contract is periodically published by almost all the newspapers in Nigeria via paid advert placements by the NNPC?’’ Green quipped.

Aminu Tambuwal, Speaker, House of Representatives
Aminu Tambuwal, Speaker, House of Representatives

The NNPC spokesperson explained that in practice the corporation sells Nigerian government equity crude oil to lifters/traders engaged on annual term contract basis, adding that at present, there are about 50 of such term contracts. “No company has a monopoly or exclusive right to lift any quantity of Nigerian crude oil. The process of selection of traders/lifters is competitive and transparent. Traders lift crude oil according to the terms of contractual agreements applicable to all traders, among others on Free on Board, FOB, basis and proceeds paid directly into designated Central Bank of Nigeria crude oil sales accounts,” she said.

On the allegation that Nigeria’s crude oil is sold to some companies at special discounted rate, Green countered, “Nigerian crude oil is sold at published official selling price, which is not only bench-marked against the internationally recognised pricing institution, (Platts daily publications), but also fixed after a critical analysis of market fundamentals and price determinants at global level. Official selling price differentials are crude stream determined and cannot favour an individual or group of traders as being insinuated.”

Green thanked the Nigerian media for their sustained show of support for the growth of the oil and gas industry while appealing to them to always resist the temptation of endorsing foreign media reports about the industry as gospel truth.

Nonetheless, the House of Representatives on November 12, mandated its committed petroleum resources and justice to investigate the allegation and report back within four weeks.

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