Reps investigate NNPC over alleged dubious $6.8bn oil deals with Swiss firms
The House of Representatives on Tuesday ordered an enquiry into an alleged collusion between the Nigerian National Petroleum Corporation (NNPC) and some Swiss oil trading firms to deprive Nigeria of crude oil revenue worth $6.8bn.
The House mandated its three committees of Petroleum Resources (Upstream), Petroleum Resources (Downstream) and Justice to probe the alleged dubious deals and produce a report on the assignment within four weeks.
A motion moved by Mr. Abiodun Balogun alleged that Nigeria's crude oil sales to Swiss private traders were 'below the market value'.
A report by Swiss Non-Governmental Advocacy Organisation, the Berne Declaration, had uncovered the alleged deals.
Balogun noted that the report titled, 'Swiss Traders' Opaque Deals in Nigeria' detailed how Nigeria would be losing billions of dollars of oil revenue to the foreign traders through some 'Letter Box Companies.'
He said NNPC trading partners, Vitol and Transfigura Commodity Trading Firms, were listed by the report as major stakeholders facilitating the deals.
Part of the motion read, 'The Berne Declaration has described the Nigerian oil scam as the greatest fraud Africa has ever known and the report specifically mentioned Vitol and Transfigura Commodity Trading Firms (NNPC partners) in the shady deals and how Nigeria loses billions of dollars as large volumes of oil are exported far below the market prices.
'The exclusive and non-transparent partnerships of Vitol and Transfigura with NNPC gave them over 36 per cent of the market share, with the NNPC selling its crude at discounts.
'Why is Nigeria the only major oil-producing nation that sells 100 per cent of its crude to private traders rather than markets it herself and benefit from the resulting added value with the greatest number of beneficiaries of export allocations?
'The House is worried by sharp practices and deals in NNPC crude oil allocations to local refineries which are not utilised but sold fraudulently at knock down prices to Geneva-based companies through letter box companies by swap arrangements.'
The lawmaker added that the report also indicated that the NNPC and its subsidiaries had not published a detailed financial report since 2005.
The motion was not debated further in order not to influence the outcome of the investigation.