How Diezani Approved $24bn Crude Oil Swap Without Contract - Ex-NNPC GMD Reveals

Former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke

 

Former GMD of the Nigerian National Petroleum Corporation has given interesting details how the former Minister of Petroleum breached protocol by approving $24bn crude swap without contract. 

A former Group Managing Director of the Nigerian National Petroleum Corporation, Mr. Austin Oniwon, has told the House of Representatives Ad Hoc Committee on Tuesday that former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke approved the lifting of $24bn worth of crude oil from the country between 2011 and 2014 without a formal contract.

 

Oniwon told the House of Representatives Ad Hoc Committee that the former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, merely granted the “extension” of an earlier contract. He said the extension was not a formal contract before he (Oniwon) left office in 2012.

 

“There was an approval for the extension by the minister; I believe the records are with the NNPC,” he added.

 

The committee chaired by an All Progressives Congress lawmaker from Kwara State, Mr. Zakari Mohammed also learnt that the NNPC began taking 445,000 barrels of crude daily in 2010 for refining in a bid to meet the country’s local demand of petroleum products. But when the country’s refineries failed to run, the NNPC resorted to exchanging the crude (swap) for refined products through an arrangement with appointed crude trading firms, Punch reports.

 

According to him, the original (first) contract was signed between the NNPC and two crude traders, Duke Oil and Tranfigura in 2010 to last for one year. It expired officially in 2011. Instead of signing a formal contract, Alison-Madueke reportedly granted an extension of the contract without the NNPC formally signing another contract on the new (second) deal which was foul to the procedure. It was blatantly against the procedures. However, he revealed that lifting of crude oil continued till 2014 before a contract was formalised.

 

It was revealed that Oniwon made the revelation under pressure after he had said there was no breach in the exchange arrangements throughout his tenure.

 

One of the lawmakers, Mr. Michael Enyong, said, “These companies had lifted crude worth $24bn before the contract was signed in 2014 and backdated to look like it was signed in 2011 when the first one expired.”

 

He however, gave in and said Alison-Madueke "approved" the extension.

 

Oniwon also argued that as GMD of the NNPC, he did not require a presidential and Federal Executive Council approval to enter into the swap arrangements.

 

However, the committee insisted that the NNPC under Oniwon and the former minister breached procurement procedures by engaging in a transaction worth well above N100m without FEC’s approval.

 

Oniwon’s successor, Mr. Andrew Yakubu, also appeared before the committee to explain his side of the story. Yakubu, who assumed office as GMD on June 27, 2012, disclosed that he set up a team of experts from the legal and corporate divisions of the NNPC to carry out the review after which he sent a report to Alison-Madueke.

 

He added, “Among the issues we raised were the controversies generated by the swap arrangement, the need for contract valuation and how to improve on it to be more beneficial to our operations.

“I forwarded a report to the minister in April 2014 and the document never came to me until my removal (as GMD) was announced by 9pm on August 1, 2014.”

 

The committee directed the NNPC to search its records and produce Yakubu’s report. Members also asked the corporation to produce evidence of the extension of the contract Alison-Madueke granted without a formal contract.