ANEEJ CALLS FOR ABOLISION OF CRUDE OIL SWAPS

October 31, 2014

URGENT MEDIA RELEASE

ANEEJ CALLS FOR ABOLISION OF CRUDE OIL SWAPS

The Africa Network for Environment and Economic Justice (ANEEJ) has called on the Federal Government to abolish crude oil swaps without any further delay.

ANEEJ in an advocacy position paper to the House of Representative Committee on Petroleum (Downstream) over the on-going inquiry on massive corruption around oil swap deals involving some Swiss oil firms with roots in Nigeria called on the National Assembly to do all in its powers to end oil swaps in Nigeria.

ANEEJ Team of four led by its Deputy Executive Director, Comrade Leo Atakpu in the position paper handed over to the Clerk of the Committee, Mallam Ibrahim Sidi for onward transmission to the Chairman of the committee and members noted that “After a critical analyses of available information on the crude oil deals negotiated and executed between Nigeria and its partners, we have come to the conclusion that crude oil swaps, especially as being currently practiced in Nigeria negates known measures of international best practices.

“As much as it is the responsibility of the executive arm of government to fix the numerous problems plaguing the sector, the Legislature is better placed to initiate and oversight that process, given the position of the latter as the pulse of any democracy. At the risk of bothering you with the obvious, the legislature is imbued with the constitutional responsibility of constituency representation, law-making and exercise of oversight. Indeed, there is no democracy in a society where the legislature ceases to exist or performs its functions. Aligning with the position argued above, the NASS is the pulse of Nigeria’s democracy. As applicable to all countries operating bi-camera legislature, the Nigerian House of Representatives which you belong symbolizes the nearest representation of the people at the central government. This is why the push for reform of the oil and gas sector in Nigeria must start with you.” ANEEJ told the law makers.

As a pathway, ANEEJ appealed with the House through the committee to see to the abolition of the scam called crude oil swap. It urged the committee to ensure that local refineries are allocated only the crude they can absolve, while the remainder of the 445,000 barrels daily allocation for domestic use is sold at internationally competitive price.” ANEEJ said Nigeria should sell the unutilized crude by its local refineries at international market price in the same manner it imports refined products that it eventually subsidizes.

The group also called on the House of Representatives to commit to leading Nigerian citizens to fight oil swap practice, by pushing for investigation and prosecution of Nigerians that are involved. This, according to ANEEJ, is necessary because the complicity of insiders within NNPC, oil companies and government, and the tendency to act contrary to laid down rules and procedures, have become the cracks surviving crude oil swap business.

ANEEJ equally posits that “it is of essence that some urgent actions are taken to bring back Nigeria’s moribund refineries. Such action, the NGO said should look beyond the very emotive issue of “subsidy removal”.

“We need to act in the direction of liberalization as against privatization. The story of the telecommunications that is often misconstrued as privatization (but which is not exactly correct) is a good example. A liberalization of the process, even if it means bypassing the domestic market to sell products abroad, will encourage investment and job creation for Nigerians.” It observed.

“ANEEJ calls on the Nigerian authorities to emulate countries that are better able to manage their oil and gas sector by embracing reforms that will transform it, such as Norway and Shetlands in USA.

“ANEEJ also noted that the non-passage of the PIB since 1998 when it was first introduced in the NASS has denied Nigeria of its potential for transforming the downstream oil sector and the associated issues of crude oil swap. It therefore called on the National Assembly to expeditiously pass the Petroleum Industry Bill without any further delay.” It said

The Group also appealed to the lawmakers to consider passing a law that mandates the Minister of Petroleum Resources (and perhaps his/her counterpart in the Ministry of Mines and Steel Development) to address it annually on development in the industry. This, according to ANEEJ, will enable parliament to assess firsthand information about policy, trading and investment in the industry as against the current practice of responding only to whistle blowing in the media.

ANEEJ also urged members of the National Assembly to activate a mechanism for dealing with the challenges of crude oil swap through global action. “The Swiss Federal Government is reported as currently working on a forthcoming transparency which it intends to exempt commodities (trading) sector. This step, apart from being at odds with the EU Accounting and Transparency Directive and the US Dodd Frank Law, points to how the Swiss government entrenches itself as the haven for stolen money and shady businesses. The National Assembly needs to be in the forefront of the fight against such unjust practices that will shortchange Nigeria from realising maximum benefits from its oil and gas wealth.” Mr. Atakpu said in the statement.

For Further Information contact: info@aneej.org