$6.8 Bn NNPC/Swiss Traders ‘Fraud’: The Backside Of The Story By Ifeanyi Izeze


diezani-allisonThe dramatized outrage in the National Assembly over the $6.8 billion (about N1.07 trillion) alleged fraud involving the Nigerian National Petroleum Corporation (NNPC) and two Swiss oil traders, could best be described as self–deceit and outright nonsense.  Playing unnecessary partisan politics with the seriousness of this matter is in itself a more serious fraud against the Nigerian people.

The question is: did the Swiss NGO say anything we did not know here? No! Is there anything new in the relationship between the NNPC and the Swiss trading duo, Trafigura and Vitol? Nothing at all! Did it start today? The answer is No! The scheme has been in place since 2009 so giving the wrong impression that it was a Jonathan thing was as usual unnecessary politicization of a very serious crime that has drained our national coffer.

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It was a report: “Swiss Traders Opaque Deals in Nigeria,” by a Swiss non-governmental advocacy organisation, the Berne Declaration, that outlined how the NNPC, in connivance with two Swiss oil trading companies- Vitol and Trafigura, drained Nigeria of over $6.8 billion in subsidy payments through shady deals involving lifting of crude oil at prices far below what obtained in the open market.

The meat of the Swiss report was that the ‘exclusive’ partnerships of Vitol and Trafigura with the NNPC gave the two Swiss commodity trading companies over 36 per cent discount off the open market prices of crude oil.

As said, Vitol and Trafigura, two major oil traders in Switzerland, and seven Nigerian fuel importers created offshore subsidiaries referred to as ‘letterbox companies’ to defraud the country of over $6.8bn in subsidy payments between 2009 and 2011 — in addition to such activities as ship-to-ship transfer to create untraceable paperwork in payment of subsidy money to non-existing importers who partnered with politically exposed persons.

Let me now say it here that all the information published by the Swiss NGO in its report, came wholesale from the Ribadu Committee Report which also lifted theirs wholesale from the NEITI 2009-2011 Audit Report. So the dramatised outrage at the National Assembly was mere politics, well rehearsed to either add to the crisis between the old and the new PDP or to support the APC smear campaign against the Jonathan government. The National Assembly would have been taken more seriously if they had rather shouted over the “death and burial” of the Ribadu Committee report or even the implementation of the recommendations of the NEITI 2009-2011 Audit report which uncovered more serious fraud in subsidy payments and most of which were perpetrated by some of these folks in the National Assembly or their political sponsors.

The lawmakers feigned pained that the NNPC was selling crude oil to the traders at give-away price (36 per cent below open market prices). This also was either a deliberate mischief or a clear exhibition of total ignorance of where the fraud/scam in the NNPC-Trafigura/Vitol deal was embellished.
This is where the real fraud is: Under the transaction, the trading companies were expected to lift Nigerian crude oil and in return, supply her with just three refined petroleum products: Premium Motor Spirit (PMS) commonly called petrol, Diesel (AGO) and Dual purpose Kerosene (DPK).

In actual fact there is no question of 36 percent discount in the first instance because the trading companies were not buying the NNPC crude oil but ‘helping’ our disabled national apex oil concern refine its crude abroad. And of course,  in addition to shortchanging the nation of over twenty by-products derivable from processing of crude oil, the NNPC still paid huge charges for the service including to and from haulage.The grey area is in the matching of the worth of crude taken away with the costing methods of the by–products of the refined crude oil including scores of derivatives. It is in the act of balancing the volume of crude lifted and the products returned in terms of volume and value that the fraud lays.

At the time this conspiracy was initiated, there were several outcries that the NNPC and the Ministry of Petroleum Resources used inconsistent and highly subjective methods to arrive at the crude-oil-for-refined-product deal with Vitol and Trafigura, Amsterdam- based Swiss trading or more aptly buying and selling companies. The allegation was then dismissed as a smear campaign by competitors that lost out in the oil-for-products swap deal.

Contrary to what some folks in the National Assembly think, the fraudulent oil –for –product swap trade was conceived, packaged and arranged by two NNPC group managing directors whose tenures ran into each other under Dr Rilwanu Lukman as minister of Petroleum in the Yar’adua administration. The idea was initiated under the late Abubakar Yar’adua whose demise saw Mohammed Barkindo taking over from where he stopped as NNPC GMD.

Shamsudeen Usman and Mansur Muktar as finance ministers (2009-2010) were fully aware of this evil conspiracy which was packaged by the NNPC to look as the only way out of the then incessant fuel crisis in the country.

President Yar’adua did not buy the idea. He raised issues over the costing methods and how the by-products were to be accounted for. But the proponents including Dr. Lukman, the gang from NNPC headed by Barkindo and politically exposed persons in and around the Yar’adua Presidency saw the opportunity provided by the late president’s incapacitation to smuggle the same template that was queried through the back door in the night to Goodluck Jonathan who then as acting president naively approved if only that would make him acceptable to the cabal that held sway at the Presidency then.
So this matter no be Diezani matter at all! It predated the present petroleum minister. Though she, with the express approval of bros, continued the scam maybe even modified it to better serve the new gang occupying the presidency.
Nigerians should be concerned that the approach the National Assembly is taking would not achieve a single result except ofcourse enriching some committee members. I bet Madueke even the Vitol and Trafigura people have more than enough and ofcourse genuine explanation to dazzle or more aptly confuse the National Assembly on this matter. Mark my words!

Truth be told, the method used in arriving at the $6.8 billion being dangled as loss to the nation could best be described as subjective. And depending on the political meter used, the pendulum can swing either to the far more or far less side depending on who is taking the measurement.

How was the cumulative loss in terms of all the derivable by-products generated from processing the volume of crude oil the Swiss traders lifted within the period under review ascertained? How was volume-by volume and then value per value of the lifted crude against the petrol, diesel and kerosene these Swiss thieves returned to us in the swap deal matched and by who? Does the National Assembly have the capacity and even the political will to be honest to do serious work along these lines? It does not.

Honestly, this country needs a change in approach in its efforts to tackle the hydra-headed problem of corruption in government and its agencies. Rather than harass the petroleum minister and everybody involved for few days and just let them go on a clean bill, is it not better to look at ways of retrieving what was stolen from us even if it requires straining or even breaking diplomatic relations with countries where these thieves come from and also where our own thieves bank or invest monies stolen from this nation?

What has the Swiss government done or even said concerning this revelation of massive financial crime that defrauded Nigeria of over $6.8 billion as alleged? Beyond collating data of fraud from our anti-graft agency and publishing it to give the impression they are working, what is Berne Declaration, the Swiss NGO, going to do to compel their government to cooperate with Nigeria tracing and recovering this stolen money and returning same back to Nigeria, if for nothing, at least to encourage us to continue to cooperate with them in future researches/investigations?

We need to take- on some of these countries including America and Britain. It’s not enough rubbishing Nigeria as the most corrupt country in the world meanwhile, the proceeds of this stealing are housed in these countries and are part of what is sustaining their economies. Does our government even have enough morale grounds to take these kinds of action? For where! Forgive me, I think like a village diplomat!
IFEANYI IZEZE is an Abuja-based Consultant and can be reached on: iizeze@yahoo.com

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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