The former Minister for Petroleum Resources, Mrs. Diezani Alison-Madueke, who is currently undergoing extensive cancer treatment in London, has strongly refuted claims that she gave $24 billion oil swap deals without contract.
In a statement issued to journalists in Abuja, Mrs. Alison-Madueke rejected some newspaper and online reports which claimed that she granted an “extension” instead of approval for the Renewal of Contracts for the swap arrangements.
Recalling the events and putting the facts in proper perspective, the former Minister who spoke through her spokesman, Mr. Clem Aguiyi insisted that what she gave were “Approvals for Renewal of Contract for firstly, a 1 Year Term each for both Messrs Trafigura Beheer BV and Messrs Society Ivoirienne de Raffinage (SIR) in August 2010 and then for a 2 Year Term in August 2011 for the same companies. The NNPC Subsidiary, Duke Oil, was given Approval for a 1 year Term in January 2011. Two other Approvals were consequently sought by the GMD, NNPC, the first of these on the 29th August 2014 was seeking to ratify all 3 aforementioned Approvals which had apparently variously expired during the course of 2013.
“In view of the criticality of the situation, the Minister immediately Approved/Ratified all 3 Renewals. Expiry of those terms were put at 31st Dec 2014, following assurances to the Minister that the contractual obligations of the Parties to NNPC had in fact been fully met, despite the regrettable lapse in renewal time.
“The Minister noted the said lapses in expiration to renewal dates to be 7months for Duke Oil, 10 months for SIR and 12 Months for Trafigura.
Secondly, on the 28th of October 2014, following the recommendation of the then GMD, NNPC, the Minister approved OPAs for a new term of 2 years commencing from 1st January 2015. The entities recommended by NNPC were Sahara Energy Resources Ltd, Aiteo Energy and Duke Oil.
“NNPC strongly recommended and outlined the benefits of the OPA over the SWAPs and put forward the case for migration from the OPA and crude exchange (SWAP) Contracts to OPAs fully. NNPC posited that the ‘experienced benefits of the OPA to the Federation’, would be much greater. All Approvals were Due process driven and were only given by the Minister following formal statutory written requests, which contained the technical basis for the renewal and were sent to the Minister by the GMD-NNPC, as is the Normal Practice. NNPC had clearly requested for the Approval of the Honorable Minister for “Renewal of the Crude Oil – Refined Products Exchange Agreement” and “Renewal of Offshore Processing Agreement” on all the various occasions outlined earlier in this press release. Whereas, it is the Minister’s responsibility to either give or refuse ‘Approval’, it was not within her purview as Minister to draft, initiate or conclude the processes of signing the final contracts as it is the statutory responsibility of NNPC to ensure that all technical areas are duly covered and all requisite due process parameters are duly implemented’.”
According to her spokesman, “There would have been little need to respond to this particular issue at this time considering that the former minister is still indisposed and would have wished to be left alone to recuperate. She will speak for herself in due time. It is nevertheless imperative that records are set straight so that Nigerians and posterity will know the truth.
“Mr. Oniwon was right when he stated that the 445000 barrels of crude oil were the property of NNPC, bought from the Federal Government of Nigeria at the prevailing rate and therefore as GMD, he did not need the Federal Executive Councilor Presidential Approval to enter into SWAP arrangements that will enable NNPC fulfill its statutory obligations.
“It was also correct that contrary to the picture being painted in the media not more than 210,000 bpd out of the 445000 bpd lifted by NNPC to ensure adequate supply and distribution of petroleum products were traded under the following SWAP arrangement:
What the GMD required to execute the above was statutory approval from the minister for the companies! Refineries chosen by NNPC to participate in the SWAP arrangement as outlined in section 4 of the Petroleum Act and section 20 of the NNPC Act:
“It is, however, incorrect to say that the former minister gave ‘Approval for Extension’ unless “Extension” can legally be substituted for “Renewal” because what the Minister gave (and the records are there) was approval for ‘Renewal of Contract’. And these approvals were given based on letters of request received from the GMD of NNPC.”
The former Minister also described as “Extremely Disturbing the report that Trafigura and SIR had lifted crude worth $24bn before their respective contracts were signed in 2014 and that those contracts were back-dated to look like they were signed in 2011 when their initial contracts first expired. If indeed that was the case, then the Minister could not have been party to it, as the Minister is not involved in either the preparation or the Signing of NNPC Contracts. She reaffirmed that she had most certainly signed the second set of requisite Approvals requested by NNPC for Renewal of the contracts of both Messrs Trafigura Beheer BV and Messrs Societe Ivoirienne de Raffinage in August of 2011, for a 2 Year term. The Minister had clearly fulfilled her statutory obligations by signing the Request for Approval for the renewals as and when presented to her.”
She noted that “on the 29th August 2014, NNPC sought the approval of the Han Minister for a new short Contract ratification Term that would expire on 31st December 2014. It became apparent that NNPC had failed to request for ‘Ministerial Approval’ between late 2013 and August 2014 when the previous respective contracts had variously expired which meant that the various transactions had had no written ‘Contractual Cover’ for the periods varying from 7 months to 12 months as follows:
1. SIR: Contract Expired 3rd October 2013 and was Renewed 29th August 2014 (10 months without written Contract)
2. TRAFIGURA: Contract expired 30th September 2013 and was renewed
29th August 2014. (12 months without written Contract)
3. Duke Oil: Contract expired 30th January 2014 and was renewed 29th August
2014. (7 months without written Contract).
“It must be noted that the Corporation gave assurances to the Minister that it had assiduously upheld all its rights and performed its obligations as if a written contract existed during the periods mentioned, thereby ensuring the protection and safe guard of all national interests.”
The former Minister also took time to correct what she described as “the erroneous impression being created by the media that she originated the OPA and SWAP arrangements.
“It is important to note that the crude oil swap arrangement predates the tenure of Mrs. Alison-Madueke as Minister of Petroleum Resources. All the Swap/ Offshore Processing arrangements currently in place and under her watch followed the same rigid template that was established by late Alhaji Rilwanu Lukman as Petroleum Resources Minister and approved by late President Musa Var’adua in 2009. The Yar’adua administration had in 2009 signed a one year term Offshore Processing Agreement with NIGERMED PETROLEUM SA, a joint venture company between NNPC and British Petroleum International (BPI).
According to her spokesman, ‘the Offshore Processing Arrangement (OPA) and Crude Oil – Product Swap’ were strategic arrangements/decisions reached by the NNPC and the Federal Government in 2009 in view of the down-time of the nation’s refineries. The arrangement was designed to help NNPC achieve an effective and robust petroleum products delivery option to the Nigerian public.
“Under this arrangement, it is the responsibility of NNPC to identify a crude oil trader and term contract holder who has affiliation with a refinery. The Minister’s role is limited to granting statutory approval to requests made by NNPC in this regard’. The Minister never exceeded her powers nor did she take on the role of anyone else.”