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Oil Shoots Up On Huge Crude Inventory Draw

Oil Shoots Up On Huge Crude Inventory Draw

Crude prices jumped today after…

Nigeria Reveals Details Of $20 Billion Dollar Oil Swap Corruption

A Nigerian parliamentary committee has announced major anti-corruption findings in relation to a multi-billion-dollar crude oil swaps program with foreign companies.

The ad-hoc committee revealed that there were no formal contracts between the Nigerian National Petroleum Corporation (NNPC) and trading companies that received $24 billion worth of Nigerian crude oil between 2011 and 2014.

According to the results of the investigation, the former minister of petroleum resources, Diezani Alison-Madueke, illegally allowed for a swap of Nigerian crude oil for refined products to trading firms Duke Oil and Trafigura.

Related: The Biggest Natural Gas Discovery Of 2016 Just Got Bigger

In 2010, the NNPC began taking 445,000 barrels of crude daily for refining in a bid to meet the country’s local demand of petroleum products. When the refineries failed to meet this commitment, the NNPC moved to swap the crude for refined products with trading firms.

The official contracts with the two trading firms expired in 2011, according to Nigerian media reports citing the investigation results; however, Alison-Madueke reportedly granted an extension of the contract without the NNPC’s formal signing.

Earlier this month, the government suspended swaps with foreign suppliers. The new policy, Direct-Sale–Direct-Purchase (DSDP), is scheduled to be launched in March.

Related: OPEC Ups Pressure On Iraq, Iran To Freeze Production

President Muhammadu Buhari, who was elected last March, promised the reconstruction of oil industry and investigation into previous government officials suspected of oil embezzlement. Buhari has previously said treasury coffers were virtually empty when he took office in May and that huge sums of money had been stolen.

Africa’s biggest economy faces its worst economic crisis in years, since it relies on oil exports for about 58 percent of government revenue. In the oil sector alone, Buhari said $150 billion was believed to have been looted by crooked politicians and that 250,000 barrels of crude oil were stolen in Nigeria each day.

Related: Oil Production Rumor Mill Continues To Turn As Iran Hints At Freeze

Buhari has already split the state-owned NNPC oil company into two entities in a bid to tackle corruption.

Alison-Madueke was arrested in October in London on the request of Nigerian authorities who alleged that $20 billion in oil money had gone missing under her watch. Several other officials under former president Goodluck Jonathan are also being investigated by the authorities.

By Charles Kennedy of Oilprice.com

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