Contrary to trending claims and allegations by the Nigeria National Petroleum Corporation (NNPC) that Capital Oil & Gas Limited managed by Dr. Ifeanyi Ubah siphoned petroleum products stored under his care to the tune of N11bn and recently paid in N2bn, proceedings at the investigative hearing at the House of Representatives has proved otherwise.
Managing Director of Capital Oil and Gas, Dr. Ifeanyi Ubah, clearly exposed lapses in the NNPC accounting system during the hearing which lead to the discovery that the corporation owes his company N16 billion with a key portion of the debt spanning over two years.
Dr. Ubah, provided in-depth details and analysis of the contractual agreement between the NNPC and Capital Oil and Gas.
Ubah provided documentary evidence showing that everything Capital Oil did was within the purview of the dynamics of the business practice in throughput storage management worldwide and has been the practice for over nine years of its business relationship with the NNPC. Ubah also exonerated the DSS for his ordeals as he asserted that they were acting based on the misinformation from the national oil firm, NNPC.
According to him, Capital Oil made a payment of N2billion to NNPC in good faith in order to trigger a reconciliation exercise, a position that was made public in a Capital Oil press statement in May.
However, he condemned the fact that, till date, NNPC has failed to invite Capital Oil for the target reconciliation.
Details sighted by Business Hilights weekend, showed that the throughput contract which they operated with NNPC puts the company in a position of a stock manager which is somewhat akin to an oil bank.
This allows for commingling and loading out of product so long as Capital Oil ensures that all parties having products in their storage ultimately receive their total stock.
Capital Oil averred that “NNPC in the past have also borrowed product from us to keep their supply/distribution chain running. We duly paid for product from NNPC and were issued loading permit. However, NNPC diverted the vessel that was supposed to deliver t he product and has till date refused to deliver, thereby causing a break in the chain of product that would have plugged any gap”.
“The unprofessional way in which the issue was handled led to a run on our company operations thereby destabilizing our business and causing a shutdown of our operations. The circumstances have caused us billions of naira in losses and serious dislocations for our workers.”
The key presentation at the House hearing that turned the table of blame was that “In other to avoid true reconciliation of accounts, NNPC decided to present the issue to the public and other government agencies and deliberately left out vital information in a bid to misinform the public, particularly the fact that the NNPC owes Capital Oil and Gas the sum of N16billion”.
Capital Oil stated that the NNPC owes the company the sum of N3,146,146,920 representing payment for 20,000MT of PMS for which the payment was duly made since 14th February 2017 vide PFI and N1,170,452,408 representing the company outstanding throughput bills have remained unpaid since March 2016 to date.
Again, $2,952,555 and N6,000,000 representing outstanding payment for coastal vessel intervention bill, have not been paid since 2015. While explaining that N59,320,045.57 representing short-payment from previous throughput bills have not been paid, Ubah added that N5,709,981,426 and N556,202,326 being statutory payment of jetty throughput charge of N.80k/litre and N.40k/litre respectively owed to Capital Oil has remained unpaid despite the fact that NNPC either received or deducted the payments from PPPRA.
According to Ubah, NNPC owes Capital Oil N341,106,990.95 representing throughput services bill. On berthing fees of $20,000 per vessel, Ubah said that NNPC shipping agents on behalf of the corporation paid a total of $2,999,919 leaving an outstanding of $5,540,000. He concluded by stating that the total Naira component stood at N10,983,210,116.52 without accrued interest while the Dollar component stood at $8,492,555.
Capital Oil and Gas Industries have been providing strategic and excellent services to NNPC over the past nine years and have discharged over 8billion litres of petroleum products for distribution nationwide, added that “we have rendered services to NNPC in the last nine years, no Nigerian downstream company could render up to 35%. We should be commended and not castigated”.
“On many occasions, we have loaned millions of litres of petroleum products from our storage to the NNPC group without alerting or alarming the public, which, if done, would have created serious National panic and scarcity. Thus, we have always kept the confidentiality of our relationship sacrosanct.
“It is in the light of these indisputable circumstances that we are shocked at and disappointed with the actions of NNPC in throwing the issue to the public and calling in law enforcement agencies without fully exploring the available dispute resolutions mechanism available within the purview of our contractual relationship.
“These unwarranted and unjustifiable actions have caused our company so much injury not only in the loss of patronage and goodwill nationally and internationally but in loss of business, revenues and a shutdown of our operations that has resulted in the loss of gainful employment of our over 2000 workers for the period the company had remained shut down.
Ubah’s presentation was given more credence when the NNPC Retail representative, Danjuma Dansule admitted that Capital Oil and Gas still remains a credit-worthy company to do business with. He also admitted to having Capital Oil and Gas’ product which has been duly and fully paid for.
Chairman of the House Committee, Hon. Joseph Alakija expressed deep anger on why NNPC who gave Capital Oil a clean bill of health in December 2016 and turn around to allege that the same company diverted its products in January 2017.
While chiding the forceful retirement of Mrs. Nnamdi-Ogbue, the former Managing Director of NNPC Retail without a holistic investigation and fair hearing, Alakija assured Ubah that it can help it to recover its money.