http://saharareporters.com/2015/04/28/oil-swap-fraud-aiteo-alleged-front-gej-diezani-buhari%E2%80%99s-cross-hairs

Oil Swap Fraud: Aiteo, Alleged Front For GEJ & Diezani, In Buhari’s Cross-hairs

BY SAHARA REPORTERS, NEW YORKAPR 28, 2015

As the vultures circle Nigeria’s troubled oil industry with Muhammadu Buhari taking office in just four weeks, Aiteo, a key player which is alleged to be a front for President Goodluck Jonathan and Petroleum Resources Minister Diezani Alison-Madueke, appears to be heading for a major investigation, according to an analysis in Energy Compass.

“Companies deemed close to the minister that could face further scrutiny include Nigerian trader, which has been criticized for unfairly exploiting its OPAs, and Atlantic Energy, which has allegedly lifted crude beyond its entitlements from the upstream SAAs,” Christina Katsouris wrote.

She noted that Buhari could dig deeper and hold more alleged perpetrators to account than his predecessors, partly because he has staked his credentials on fighting corruption, and because of the major power shift which is under way.




As Nigeria's new President­-elect Muhammadu Buhari and his All Progressives Congress (APC) party ready for power, state Nigerian National Petroleum Corp. (NNPC) officials, oil traders and upstream players alike are bracing for a raft of investigations into deals approved by outgoing President Goodluck Jonathan's regime. As corruption is endemic across much of Nigeria's oil sector, such probes have featured with every incoming government for decades with new presidents and lawmakers using the findings to threaten and control opponents, shake down oil companies for more cash, terminate contracts and award new ones to allies.

Buhari could dig deeper and hold more alleged perpetrators to account than his predecessors, partly because he has staked his credentials on fighting corruption, and because a major power shift is under way. Corruption became a huge issue under Jonathan, with sizeable volumes of crude allegedly squandered through offshore processing agreements (OPAs), under which traders lift crude and deliver oil products and cash back to NNPC, as well as through strategic alliance agreements (SAAs) that paid companies in crude for helping NNPC to operate upstream assets divested by Royal Dutch Shell. The government eventually commissioned PricewaterhouseCoopers (PwC) to audit NNPC's finances in 2014 but declined to release the full report (EC Mar.28'14).

Buhari is treading carefully, starting on his own doorstep by disputing his own supporters' demands for contracts to satisfy their sponsors, sources tell Energy Compass. To manage such intense pressures, some expect Buhari to keep the oil portfolio himself and appoint a minister of state for petroleum as did former President Olusegun Obasanjo (2000­07) ­­ a move that streamlined rather than eradicated such activity. Significantly, though, APC policy director Kayode Fayemi yesterday promised to publish PwC's audit in full.

The president-­elect will need a light touch in Jonathan's home, the Niger Delta, where his People's Democratic Party retains control of all states after flawed governor elections on Apr. 11 (EC Apr.17'15). Powerful former militants are conciliatory but could stir up trouble if Buhari cancels their lucrative pipeline and maritime security contracts secured through the 2010­15 amnesty agreement and ties to Jonathan. Former gang leader Ateke Tom took out a full-­page advertisement congratulating Buhari. Less predictable are militants excluded from the amnesty, who are now flexing muscles to secure contracts.

A compromise to tackle corruption without ruffling Niger Delta feathers could be in the making, under which most of the corruption gets blamed on unpopular outgoing Oil Minister Diezani Alison­Madueke, allowing Jonathan to retain the statesmanlike image he acquired on ceding power to Buhari (EC Apr.3'15). A narrative is emerging that the minister helped herself to funds raised for his election campaigns and recycled it with help from business allies. "Goodluck was kept in the dark ... without real influence over oil sector decisions," one trader said. The minister will struggle to counter this version of history, as numerous fallouts have left her with few allies, sources say.

Trader Trouble

Companies deemed close to the minister that could face further scrutiny include Nigerian trader Aiteo, which has been criticized for unfairly exploiting its OPAs, and Atlantic Energy, which has allegedly lifted crude beyond its entitlements from the upstream SAAs.

Aiteo and Geneva-­based, Nigerian-­owned trader Sahara each signed a two-­year OPA in November that took effect in January to deliver products against roughly three 950,000 barrel cargoes a month. A general rule of thumb equates approximately 120,000 tons of gasoline or kerosene to each standard cargo of crude. Contracts seen by Energy Compass outline a process requiring the counterparty to specify products and parcel sizes, delivery date range and discharge port within a week of loading the crude. Aiteo's contract requires products to be supplied within two months of crude loading.

Traders and NNPC insiders allege that by late March, Aiteo was more than 20 cargoes in arrears on the new deal. Analyzing these complex arrangements is not easy, but data obtained by Energy Compass for products shipped against January and February loadings indicates some shortfall and suggests Aiteo was casual in following contract process. For example, after loading two cargoes in January, Aiteo nominated 110,000 metric tons of dual purpose kerosene against one cargo but showed few plans to offset the other, listing only product delivery dates, with gasoline and vessels to be arranged later.


Nomination data was again incomplete in February, and tracking of delivery vessels shows a shortfall in February and March. An Aiteo spokesman contacted by Energy Compass denied any wrongdoing, arguing that contracts allow for delays of a few weeks. Analysts meanwhile say that the OPAs provide too much flexibility and are too complex ­­with more formulas, conversions and other moving parts than crude­-for­-product swaps or open­-account trading; Aiteo lacks a full crude­ trading team and has been selling through Shell.


So Buhari will have his work cut out to get to the bottom of allegations. In the long term, NNPC needs to restructure $1.5 billion in arrears on products to traders so they can return to supplying products on short­term credit (EC Sep.5'14). The more basic questions of why OPAs were chosen over NNPC's relatively expensive but more straightforward swaps, whose interests they serve, and why Aiteo and Sahara were selected also remain to be explored.


Given the political risks of investigating such deals, Buhari could quietly tell beneficiaries to repay funds dubiously obtained in exchange for waiving prosecutions. But he'll need experts to work out how much is owed, and what could replace the OPAs while NNPC remains in arrears. Traders seeking advantageous contracts for themselves are already lobbying his inner circle to proffer advice and alternatives. But Buhari would do well to tap a broader range of advisers.


Christina Katsouris, London

E don set

Wind don blow...

Ghen ghen

We just want a government that promotes accountability for our oil,nt oilcoholics

I just dey fear for d safety of GMB.

I can't even see how GMB can avoid not bringing many crooks in the oil industry to justice. His own reputation of integrity is already on the line.

So, our presido, you cannot afford to look away no matter the pressure to do so. We are waiting for your action please, otherwise yawa go gas you o.

I said it before the elections that the monumental corruption that will be exposed by an APC Government will shock Nigerians to the core of their being. GEJ and his gang looted with brazen impunity and complete callousness. Even if Buhari wants to be charitable to GEJ he will find this hard to do once in office and fully aware of how GEJ and his minions looted Nigeria mercilessly and ruined many lives.

Phew

Jorussia:
I just dey fear for d safety of GMB.

Yep ! There are too many powerful guys who will refuse to go down..

Gbawe:
I said it before the elections that the monumental corruption that will be exposed by an APC Government will shock Nigerians to the core of their being. GEJ and his gang looted with brazen impunity and complete callousness. Even if Buhari wants to be charitable to GEJ he will find this hard to do once in office and fully aware of how GEJ and his minions looted Nigeria mercilessly and ruined many lives.

Story for the gods.

The reasons many PDP stalwarts swore that GMB will never be President is gradually surfacing.
Nigerians should brace up for earth shaking revelations and I'm sure the government will not even reveal 1/4 of what they would unearth.

Another tales by moonlight, people are waiting for their N5,000, free food and 3 million jobs.

atlwireles:
Another tales by moonlight, people are waiting for their N5,000, free food and 3 million jobs.

SR hahaha...tales by sunset

Ok

They probably want to use this shadow chasing brouhaha to divert our attention from this below;

lobbish story!
is Diezani the first person to arrange trade by barter?

All these stuffs we are getting, believe me, are but just the tip of the iceberg. When the incoming government takes over proper, the sort of rot and sleaze which characterised Jonathan's government would be laid bare for us to see and a lot of folks within and outside the boundaries of this forum would be put to shame.

heads Will roll so much damage to Nigeria by PDP n Gej

"Atmosphere for Miracles"

It will take the wisdom of Solomon to navigate through this maze of deep seated corruption. Truth is,this massive corruption in the oil industry probably started during the time of Abubakar when his uncommon commitment to short circuit his own military govt and husher in a democratic one,blinded Nigeria and d international community to the underground looting and sharing of our assets.Its just that GEJ and his cabal took it to nauseating proportions.
It won't be easy to break down and restore the oil industry to a sense of sanity,but if GMB fails to do it,then its all over.
I believe he will, though he needs our prayers.

doctokwus:
It will take the wisdom of Solomon to navigate through this maze of deep seated corruption. Truth is,this massive corruption in the oil industry probably started during the time of Abubakar when his uncommon commitment to short circuit his own military govt and husher in a democratic one,blinded Nigeria and d international community to the underground looting and sharing of our assets.Its just that GEJ and his cabal took it to nauseating proportions.
It won't be easy to break down and restore the oil industry to a sense of sanity,but if GMB fails to do it,then its all over.
I believe he will, though he needs our prayers.

forget the petroluem oil industry.
better start planning on how to raise government revenue from cattle herding and production of groundnut oil!

See how heavily the children of anger and anguish have descended on this thread trying so hard to derail it.

Not a single dime from these proceeds of monumental corruption ever got to their pockets. Most of them are unemployed, and at best case scenario, undermployed, yet they insist the status quo is "Eutopic" simply because they "hate" Buhari.

Some of them even swore they'd "die seven times" if Buhari wins the elections, yet they shamelessly come around spitting bile and defecating on every single thread that exposes the rot that is Jonathan's admin.

What a sorry bunch.

tit:
lobbish story!
is Diezani the first person to arrange trade by barter?

What da heck is wrong with this girl?? lobbish ko, lobby ni. Ah ah

barcanista:
SR hahaha...tales by sunset

Ask them when Dangote or Alpha-beta will be probed for allegedly conniving with government officials to monopolize so many key sectors of the economy.


When will Buhari probe the lopsided ownership of Oil blocs by individuals of northern extraction who have no business concern in Oil industry?

The only thing we hear is probe on Eastern Nigerians, Lower Niger interests or PDP affiliates.

This is a spirit of vendetta and not in anyway a fight against corruption.

IsraeliAIRFORCE:


Ask them when Dangote or Alpha-beta will be probed for allegedly conniving with government officials to monopolize so many key sectors of the economy.


When will Buhari probe the lopsided ownership of Oil blocs by individuals of northern extraction who have no business concern in Oil industry?

The only thing we hear is probe on Eastern Nigerians, Lower Niger interests or PDP affiliates.

This is a spirit of vendetta and not in anyway a fight against corruption.

This is the gospel truth.

Buhari mite end up doing nufin for four years
How many people him wan probe
Am tired of all dis probe shitz
As far as atiku obj and IBB re untouchable,den nufin is gonna happen
Temitemi1 ma role model
Barcanista ma icon
Tit ma legend

Gbawe:
I said it before the elections that the monumental corruption that will be exposed by an APC Government will shock Nigerians to the core of their being. GEJ and his gang looted with brazen impunity and complete callousness. Even if Buhari wants to be charitable to GEJ he will find this hard to do once in office and fully aware of how GEJ and his minions looted Nigeria mercilessly and ruined many lives.

Oga were you de since. Oga barcanista de do him work come de spoil una show.


Let's watch and see if Buhari really meant his words.

You know. .....

OREMUSSANCTUS:
Buhari mite end up doing nufin for four years
How many people him wan probe
Am tired of all dis probe shitz
As far as atiku obj and IBB re untouchable,den nufin is gonna happen
Temitemi1 ma role model
Barcanista ma icon
Tit ma legend

You forgot to mention ehmmmnmn.

omenka:
See how heavily the children of anger and anguish have descended on this thread trying so hard to derail it.

Not a single dime from these proceeds of monumental corruption ever got to their pockets. Most of them are unemployed, and at best case scenario, undermployed, yet they insist the status quo is "Eutopic" simply because they "hate" Buhari.

Some of them even swore they'd "die seven times" if Buhari wins the elections, yet they shamelessly come around spitting bile and defecating on every single thread that exposes the rot that is Jonathan's admin.

What a sorry bunch.

Abeg, don't mind those hateful losers. It is right before their eyes the APC will bring transparency and efficiency to our oil sector. Needless to say that the PDP, for the past 16 years, ran the oil sector like a private slush fund for their members. This is why Nigeria has not really benefited from the huge income the oil sector has contributed to our coffers since 1999.

Tomibyte:
We just want a government that promotes accountability for our oil,nt oilcoholics

This is the key and I believe Buhari and Osinbajo will work to introduce reforms that will aid transparency, accountability and efficiency of Nigeria's oil sector. Not too difficult to do if the Government is focused on working for Nigerians and not for a gang of glorified and self-serving crooks posing as 'political leaders'.