Lawmaker Cautions Against Call for Probe of Crude Oil Swaps


Chairman of the House of Representatives Committee on Finance, Hon.

Abdulmumin Jibrin, has cautioned the All Progressives Congress (APC) against its call on the National Assembly to probe the crude oil-for-petroleum-products barter programme and particularly beam its searchlight on the activities of two indigenous oil firms involved in the crude oil swaps.

APC had on Sunday invited the House Committees on Petroleum (Downstream), Petroleum (Upstream), Justice and Senate Committee on Finance to investigate Taleveras and Aiteo, which had been engaged by the Nigerian National Petroleum Corporation (NNPC) to lift some of its crude in exchange for imported petroleum products.

APC further wondered whether there was a connection between the crude oil swaps and the $2.

85 billion winning bid both firms had submitted for Shell Nigeria's prolific oil block - Oil Mining Lease (OML) 29 - that the Anglo-Dutch multinational is selling with its 97-kilometre Nembe Creek oil pipeline.

The party described as 'incredulous that the two firms, with a track record as oil marketers (not exploration and production firms) of less than five years' experience, could have submitted such a huge bid', adding that this had put into glaring context what might be the opacity of the barter programme.

But in a reaction yesterday to the party's statement, Jibrin who is also a member of the APC, cautioned the party against jumping into the wrong conclusion over the crude oil swaps and the bid submitted by Taleveras and Aiteo for the Shell oil block and pipeline.

He said while he would not want to take issue with the party, as is a loyal member of APC who believes in the ideals and aspirations of the party, he deemed it necessary to advise the party where a mistake has been made.

'I am a loyal member of the APC, I believe in the ideals of the party and would continue to respect the party.

I also recognise that parties all over the world have the right to issue directives to their members in the legislature.

'However, the situation we have in the House today is peculiar because it is polarised and suspicions abound that have served to deepen the divisions in the green chamber instead of uniting us.

'For instance, my committee has 31 members comprising PDP (Peoples Democratic Party) and APC members, so whenever APC issues a directive, our colleagues from the PDP immediately gets suspicious about its intentions, even where they are in the best interest of the country,' he said.

Jibrin stressed that he decided to speak up on the party's statement so that the divisions and mistrust in the House would not get worse, adding: 'There is need for unity in the House, not deeper divisions.

Right now, the party should help unite the House so we can work together for the larger interest of the country and people who elected us to represent them.

'This has nothing to do with the fear that some of us who defected from the PDP to APC may be evicted from the House, because no one can ask us to vacate our seats.

However, there is a need to douse the tension in the House so we can work together instead of working at cross-purposes, and the party has a role to play in this.

' Jibrin further pointed out that given the depth of knowledge his committee and others in the House have on NNPC's finances, the party should have consulted its members before the statement was issued on the call to probe the swap programme, Taleveras and Aiteo.

Giving more insight into the crude oil swaps, he said his committee, for instance, had received several petitions on the programme in the past, and having carried out its own independent review of the transactions, he had come to the realisation that 'a lot of information out there on the swap template is over-exaggerated'.

He said: 'Our House committee has been neck deep in querying and investigating NNPC, Department of Petroleum Resources, Accountant General of the Federation and the Federal Inland Revenue Service on a frequent basis about several transactions that impact on the oil revenues paid into the Federation Account.

'This includes such transactions as crude oil lifting by companies in exchange for petroleum products.

While the importation of petroleum products is not ideal for a crude oil-producing country, but these are transactions that were put in place following NNPC's inability to meet domestic demand for petrol and other products from its refineries.

' He also cautioned the APC against being dismissive over the pedigree of Taleveras and Aiteo, stating: 'It is not the age of a company that matters, but its ability to deliver.

'We have had companies that may have existed for decades but are later sidelined by new entrants into the same business which are more efficient and technologically savvy.

' Also, commenting on the statement by the party that the $2.

85 billion bid submitted by the two firms for the Shell oil block showed that they were stupendously wealthy, Jibrin said this was not indicative of the liquidity of Taleveras and Aiteo, as companies are known to raise such funds through a combination of debt and equity.

'As is the case with most transactions, oil firms are known to hedge their risk by utilising their network of contacts to pool together their sources of funds.

'I do not believe $2.
85 billion is sitting in the bank accounts of Taleveras and Aiteo.

Even the likes of (Aliko) Dangote finance their big-ticket transactions through debt and equity coming from various partners.

This is even more imperative for oil firms, which are known to enter into partnerships to spread the risks associated with E&P activities.

'So rather than make statements that might look like we are trying to undermine indigenous oil firms, we should encourage them as part of our goal to build local content in the oil and gas sector,' he said.

Nonetheless, Jibrin added that his reaction to his party's statement should not be misconstrued as one asking the APC to turn a blind eye to any underhand deal, stating: 'We have a duty to carry out investigations where necessary, but it should be done with the full information and knowledge of what obtains in the oil and gas sector, and not just based on hearsay.