Nigeria’s NNPC silent on $6.8 billion fraudulent oil deals with Swiss firms

November 08, 2013 | Earnings Reports, Economy

NNPC Head Office, Abuja, Nigeria

NNPC Head Office, Abuja, Nigeria

Lagos – Nigeria’s state-owned energy group, the Nigerian National Petroleum Corporation (NNPC) has kept mum days after a Swiss-based non-governmental group, Berne Declaration, accused the corporation of conniving with major Swiss oil firms to defraud Nigeria of billions of dollars from crude oil deals.

The group, through its recently released report, “Swiss Traders’ Opaque Deals in Nigeria,” described NNPC’s oil deals with the Swiss traders as the greatest fraud Africa has ever known.

The report said: “No less than 6.8 billion dollars of unjustifiable subsidies were paid out in 2009 and 2011 – that is the equivalent of nearly four times the Nigerian healthcare budget for 2013.”

It said, “the all-powerful national company, the NNPC, categorised as the most opaque national oil company on the planet, itself is evidence of Nigeria’s ‘resource curse’ at work.”

The first and third largest Swiss enterprise in terms of turnover in 2012, Vitol and Trafigura, outclassed their competitors through opaque partnerships with the NNPC to defraud Nigeria, it said.

It notes that more than half of Nigerian crude oil exports pass through Switzerland and that Nigeria is the only major producing company that sells 100 per cent of its crude oil to private traders, rather than marketing it itself and benefiting from the resulting added value.

It further gave instances to show how oil sales between the NNPC and the Swiss partners were carried out at prices lower than the market rates, adding that seven of the Nigerian ‘importers’ involved in this fraud have a subsidiary in Switzerland.

The report indicts the NNPC thus: “Swiss traders do not acquire this crude oil based on public and transparent calls for tender… each year the NNPC grants the allocations of exports under obscure conditions and on the basis of criteria that are unknown outside the restricted circle of the decision makers.”

The Berne Declaration said the profit generated by NNPC and its Swiss partners escape state coffers, adding that any profits that are collected in Nigeria for the state don’t get through.

Meanwhile, efforts to get reactions from the NNPC spokesperson, Mrs Tumini E. Green, were unsuccessful as calls put to her phone were not returned.