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House Demands Details of Consortium Involved in DSDP Arrangement with NNPC Ltd

todayAugust 10, 2022

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• Seeks records from Oando Plc

Udora Orizu

The House of Representatives Ad hoc Committee investigating the daily consumption of petrol in the country has demanded the details of an oil consortium involved in the Nigerian National Petroleum Company (NNPC) Limited, Direct Sale Direct Purchase (DSDP) arrangement.

The resolution of the lawmakers was sequel to the submissions by the representatives of the consortium at the investigative hearing, chaired by Hon. Abdulkadir Abdullahi.

The consortium, which consists of three companies namely; Ashgroup Energy Ltd; Jack Energy Solutions Ltd and Vitol SA, a Switzerland-based company, entered into the DSDP agreement with the NNPC Ltd.

The consortium was represented by the Commercial Manager, Ashgroup Energy Ltd, Nazifi Alhassan and Murtala Baloni, Head, Public Affairs, Mansel Commercial Company, an affiliate company linked to Vitol SA.

The DSDP agreement was a scheme introduced by the NNPC Ltd in which oil companies lift crude oil and bring in same value in refined products into the country.

But members of the committee were not satisfied with the explanations given by Baloni about the involvement of the consortium and the role of Mansel in the scheme.

A member, Hon. Nkem Abonta (PDP, Abia), while objecting to the operations of a foreign company that failed to avail the committee with information on a transaction in Nigerian crude, said the consortium needs to be further scrutinised regarding the DSDP arrangement.

He chided Vitol SA over the letter sent to the committee requesting that the National Assembly should write their request through the Swiss Embassy to get the records. 

Making reference to a similar request by the Senate, the company stated that the communication went through the same channel and all the required information was provided for the Senate Committee.

As stated in the letter, the representative of the company emphasised that Vitol SA will run foul of a particular Swiss law if it divulges the information without the consent of Swiss authorities.

Baloni reiterated that the company is ready to provide all the necessary information regarding the DSDP arrangement with the NNPC.

However, angered by the response, Abonta said the partners in Nigeria, particularly Mansel, should be invited to explain. 

To this end, the chairman of the committee directed the clerk to write a letter inviting the managing director (MD) of Mansel Commercial Company Ltd to appear before the committee next week Tuesday.

In a similar vein, the committee also directed Oando Plc to avail it with the details of crude lifting, importation of refined products and other information as regards the DSDP arrangement.

The Head, Business Development, Oando Trading, Otaru Danjuma, who came with a brief summary of the firm’s activities relating to petrol supplies and subsidy claims, requested more time to get the documents requested by the committee.

Danjuma noted that Oando is a stand-alone firm under the DSDP and became part of the scheme in 2016.

He said: “As a stand-alone company, when the allocations come out from NNPC, a request is made for us to deliver a cargo of products. The volumes differ. The dates differ. However, the crude is allocated as against the value of that product we have supplied. And what NNPC does sometimes is that NNPC releases an allocation, the allocation is valued and you requested to bring back PMS of that value and we reconcile. We reconcile on a quarterly basis.

“Upon arrival of the vessel, arrangements will have already been made by the NNPC to receive the cargo upon arrival. Our responsibility stops at the point of handover. We discharge to daughter vessels or jetties based on the instructions that are given to us by the PPMC. We don’t have depots.”

When a member of the committee, Hon. Nkem Abonta, expressed concern over Oando not having depots, Danjuma, in his response, stated that the contract does not require the oil firm to store the products but just to import them into the country.

The Oando representative also noted that NNPC has inspectors who confirm the quality and quantity of imported products.

On if vessels have demurrage, the Oando official confirmed it, blaming it on “certain factors” concerning the NNPC.

Responding to a question on how the firm recoups the demurrage, Danjuma said: “The demurrage is factored into the total cost of the products.”

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todayAugust 10, 2022

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