Twenty well connected companies are vying for a slot under a revised plan by Nigeria to reinstate the now discredited contracts of swapping crude oil for petroleum products, BusinessDay has learnt.
The scheme gained notoriety during the free wheeling era of disgraced petroleum minister, Diezani Alison-Madueke.
The regime of well paying contracts which involves allocating an agreed crude oil volume to an organisation for the supply of refined products could ensure margins of up to $30 million at a time and it is said to have financed many of the about 200 private jets that now litter the country’s skies.
The Nigerian government is currently compiling a short list of the hyper connected companies that will be given crude oil shipments in exchange for petroleum products to be distributed via the about 20,000 gas stations in Nigeria.
The list for the swap deal which has led to several investigations in the past, is being prepared at the Presidency, with input from the NNPC, according to government officials.
Not much is changing between this scheme and that conducted during the era of former President Goodluck Jonathan, except that the Buhari government will now call the new deals “direct sale direct purchase” (DSDP) agreements but it is still a swap deal with hidden and murky elements that ensure unbelievable margins, found only in Nigeria.
According to our sources, 20 Nigerian and foreign trading firms are on the shortlist of these new direct sale direct purchase contracts.
BusinessDay learnt that for most of these arrangements, a Nigerian trading firm would be paired with a foreign trader.
Virtually all of the companies being shortlisted are also on the list for Nigeria’s crude allocations announced earlier in the year.
Leading the pile is Trafigura, which hopes to pair with Kano businessman Auwalu Abdullahi Ran’s firm AA Rano. Michael Hacking’s South African company Mocoh, will work with Heyden Oil, run by dashing Dapo Abiodun, a close friend of the well connected governor of Ogun state, Ibikunle Amosun, a fervent supporter of Buhari. Many are already betting Abiodun will be the next governor of Ogun state.
According to investigations, Spanish firm Cepsa, is expected to team up with the never missing Oando. Both already have been allocated cargos of crude.
Another familiar name will likely be that of Sahara Energy that is said to have decided to present its candidature with Societe Ivoirienne de raffinage, with whom it is already in business.
MRS, owned by Sayyu Idris Dantata, will work in tandem with Russian trader Litasco. There are a few players for whom this will be their first swap in the NNPC crude swap arrangement and they are Mercuria which will team up with Matrix Energy, led by AbdulKabir Adisa Aliu, Azerbaijani state-owned firm Socar will work with the Rahamaniyya Group run by Sokoto trader Abdulrahaman Musa–Bashir, a close friend of governor Aminu Tambuwal.
South African firm, Petrocam is to be paired with Rainoil led by Gabriel Ogbechie.
It is believed that only two foreign companies may manage to side step the Presidency’s requirement to work with a local Nigerian partner for the swap contracts.
Total, which is making the case that it will be working with its trading and distribution unit in Nigeria, may not have to team up with a local company.
The same goes for trading giant, Vitol, which will work with Varo, the Nigerian firm it controls in a 50/50 split with Helios. Vitol can make the case that it already has a local subsidiary via Hyson (an existing Joint Venture with NNPC).
By Our Reporter
