Some foreign oil firms have been implicated in the multi-billion dollar oil swap probe, it was learnt at the weekend.
The investigation might be extended to four oil giants, said a source, who recalled that the crude oil swap began between 1977 and 1986. He did not name the companies so that, according to him, the probe is not jeopardised.
But the current scandal began in 2009 when the Nigeria National Petroleum Corporation (NNPC)/Pipelines Products Marketing Company (PPMC) advertised sought proposals for Offshore Processing Arrangement and other proposals to guarantee fuel supply.
It was learnt that a $2billion debt on importation of petroleum products made NNPC to embrace this option, which has been grossly abused.
These disclosures were contained in a document made available to one of the security agencies handling the ongoing probe.
The document reads in part: “The ongoing investigation of oil swap agreement is incomplete without looking at the involvement of some International Oil Companies(IOCs). The probe should be holistic.
“It is very curious to see all of these negative reports and also the exclusion of the names of foreign and International Companies that have for many years taken part in these SWAP and Offshore Processing Contracts absent from all of these news and reports.
“ When foreigners (multinationals) were handling crude swap and delivering Petroleum Products on Open Account for Nigeria, our government was buying refined products at PLATTS plus $136-180/metric from these multinationals. The government was equally required to pay interest to the multinationals on delayed receivables. The government incurred the cost of logistics and handling unlike the arrangement where we have local players participating…
“But local companies sell at PLATTS plus $82/metric ton and the government does not pay interest on delayed receivables.
“These foreign companies create wealth and employment for their countries, why can’t Nigeria do the same with its own people and companies? Instead, Nigerians let envy get the better part by fighting their very own.”
The document said although the present oil swap scandal was traceable to 2009, the nation had been involved in it since 1977.
It added: “Crude Swap/ Offshore Processing arrangements have been a Federal Government initiative since 1977 in partnership with International Oil companies (IOCs).
“Nigerians must know that the supposed interim policy of the NNPC to bridge the gap between petroleum products demand and supply was initiated over three decades ago between 1977 and 1986 when Nigeria needed heavy crude from Venezuela to feed the recently opened Kaduna refinery. We as a nation swapped Venezuela heavy crude for Nigeria’s light crude.
“The scope of crude swap was later broadened specifically because our refineries began to produce below their stipulated name plate capacity.
“In addition, NNPC/PPMC from late 1990s-2010 used to import Petroleum Products on an Open Account backed by a PPMC Payment undertaking that payment will be made 45 days after imported vessels arrive.
“This payment timeline was never met with payment delays running to 400 days late, currently with an outstanding debt to Importers and bankers of close to $2billion currently standing at 7 Years late payment,
“No Local or International Bank will finance any NNPC/PPMC imports on an open account. Banks need to see a solid bankable security or guarantee to finance any import to NNPC/PPMC due to their indebtedness and bad payment record. “NNPC/PPMC used to rely on their refineries Un-Utilized Crude oil barrels to fund these open account Payment Batches. With this challenge to NNPC and Government, this posed a problem to 50% of fuel supply into Nigeria around 2009 and 2010.
To avert this, NNPC/PPMC advertised in 2009 inviting for proposals for Offshore Processing Arrangement and other proposals to guarantee fuel supply to Nigeria. Thus crude swap/ OPAs concept widened to include crude for refined products, which had been in practice with Oil Majors more than two decades. British Petroleum and SIR refinery of Ivory Coast were the first engaged in late 2000s for this.”