In the concluding part of the trail of stolen oil from the world’s sixth largest producer, investigative reporter, Emmanuel Mayah, lays hands on documents produced for transactions to make an illegal trade in stolen Nigerian crude look genuine in the Togo Triangle. Pirates are also in on the game, posing danger to buyers and sellers alike.
However, Nigerian collaborators still amass illegal proceeds enough to buy up hotels and luxury homes in some countries on the West African coast.
Andrew Yakubu, NNPC Managing Director.
Most people in the crowd at Togo Triangle are mere foot soldiers. Oil traders based anywhere in the world can remotely arrange buys. They only have to charter a tanker and provide the vessel owner and captain with technical information: where and when to pick up and offload cargo and how much.
Ship owners, captain and crew may never know the seller’s or buyer’s identity or the cargo’s provenance.
The thriving illegal trade of refined petroleum products creates strong incentives for piracy. Pirates target the large amounts of cash used for illegal deals, as well as the fuel, which they can then sell on the black market.
The addition of piracy into the equation makes Togo Triangle a very dangerous place to go, day or night.
Transactions and documents
One of the documents Novinyo provided has as seller, GAVF International Nigeria Ltd, and PetroGhana Ltd as buyer. The inspection company is SGS-Benin. The tugboat name is MV MSS Supply; its colour blue and white and its captain Hadonou Francis. The name of the super cargo is Daniel Bright, a Ghanaian whose travel passport is reproduced on the document.
The basic steps in the transaction begins as follows:
• “Buyer and seller sign and seal contract documents, copies of which are deposited by either party with his bank. Buyer raises draft in favour of seller for marine ATB to be cashable upon confirmation of the marine ATB by the buyer.
• “Seller releases his ATB and calls the buyer super cargo on board. Buyer’s bank releases to seller’s bank his bank guarantee to the full value of the cargo and commissions.
• “Seller moves vessel to Beninoise, Togolese or Ghanaian waters at buyer’s request for Q&Q. Buyer’s inspection agent confirms the quality and quantity, and upon certification, buyer places charter on the vessel from the vessel owner.
• “Seller procures and presents a complete set of shipping documents in favour of buyer as specified or may be required by LCD/BG.
• Payment is effected by Swift Wire Transfer within 24 hours after presentation of documents as specified and the cargo led to Togolese waters.
• Buyer’s vessel is allowed to sail to buyer’s disport.”
The document finds space to explain that the crude oil is of Nigerian origin; that the seller has the independent capacity and ability to purchase the product from the NNPC or its official lifters and re-sell to the buyer. The buyer’s agent and the seller’s agent, both also called facilitators, are each entitled to a commission of $2 per barrel.
But Novinyo has never earned $2 per barrel. Most times a group of four to six facilitators come together to work on one transaction and thereafter split the commission. He said he has heard stories of crude brazenly stolen from pipelines and loading terminals, and that officials at terminals may decide to pump more crude into a vessel.
“A vessel may have authorisation to lift 60,000 barrels of crude but someone at the terminal decides to feed it with 140,000 barrels. That is not a mistake you know. The vessel will later transfer the surplus to another tanker. You and I are not to blame. We are only looking for something to eat,” Novinyo added.
Perhaps the easiest way of stealing crude from Nigeria is through an official process called crude oil swap. The PPMC has swap contracts with a number of companies that empowers them to lift crude oil from Nigeria for free, sell the products on the international market, and use the proceeds to import premium motor spirit (PMS) or petrol.
The PPMC signed a swap agreement with SIR Refinery of Cote d’Ivoire. SIR is supposed to process the crude at its Abidjan facility, then ship the refined products, mostly petrol, kerosene and diesel back to Nigeria.
The deal entitles SIR to a $2.50 per barrel “processing fee”. Between 200,000 and 220,000 barrels per day (bpd) are taken out of the country under swap arrangements with different companies; however, there is no proof there is any swap-refining going on in Cote d’Ivoire Coast. And SIR hardly lifts a finger.
SIR, owned by the Ivoirien government, has since sub-contracted the swap to another oil company called Sahara Oil. The deal allows Sahara to lift and sell all the crude oil allocated to SIR by the PPMC on the open market.
It is alleged that SIR is helping the fat cats in the NNPC to sell stolen crude taken out of Nigeria through this arrangement. Nobody can say for sure the volume of crude actually lifted by SIR even though the contract states 60,000 bpd.
A crime advertised
Because of glut in illicit oil with supply sometimes outstripping demand, advertisement of stolen crude from Nigeria is common on the internet.
One read: “Hello we are expecting over 200kmt of AGO in Togo Triangle over the weekend and we need real and urgent buyers to pick the product immediately.
“I have the bill of lading and confirmation of product with me already. Buyer signs SPA and returns then I will forward the bill of lading and the confirmation of product for buyer to raise a BCL or POF. Please only real buyers should reach me. Thanks.”
The advertisement went on to give the seller’s contacts and email. When this reporter called the telephone number, a male voice assured that he is a certified marketer listed in NNPC books.
Another online advertisement stated: “Bonnie Light Crude oil TTO Togo Triangle vessel available with all loading documents and CPA for a buyer to confirm and place MT799, then board for Q&Q and place MT103 thereafter. TTT transactions – Lome/Togo Triangle/Nigerian waters.
“The price for each barrel of Bonny Light crude oil delivered on out-turned barrels shall be based on dated Brent on the date of transfer as published by McGraw Hill market wire, less discount of $6.00 per barrel; $3.00 net to buyer; $3.00 to brokers/facilitators & consultants.
“Commissions: $1.50 seller’s agents/brokers & facilitators – (closed) $1.50 buyer’s agents/brokers & facilitators TTO transactions – Lome/Togo Triangle/Nigerian waters.
“The price for each barrel of Bonny Light crude oil delivered on out-turned barrels shall be based on dated Brent on the date of transfer as published by McGraw Hill market wire, less discount of $6.00 per barrel; $3.00 net to buyer; $3.00 to brokers/facilitators & consultants.
“Commissions: $1.50 seller’s agents/brokers & facilitators – (closed) $1.50 buyer s gents/brokers & facilitators CIF transactions – buyer’s port of discharge (ASWP).
“The price for each barrel of Bonny Light crude oil delivered on out-turned barrels shall be based on dated Brent on the date of transfer as published by McGraw Hill market wire, less discount of $4.00 per barrel; $2.00 net to buyer; $2.00 to brokers/facilitators & consultants.
“Commissions: $1.00 seller’s agents/brokers & facilitators – (closed) $1.00 buyer’s agents/brokers & facilitators.
“Note: the above information will be incorporated into the SPA containing seller’s information that will be presented to the buyer. Discounts are subject to change based on transactions/product availability.”
A parallel oil industry
Large as the market for stolen crude is, the trade in refined petroleum products from Nigeria is even more rife. The pathetic state of Nigeria’s four refineries has for decades enthroned a regime of massive importation of refined products.
Very large tankers known as motherships – holding some 60,000 metric tonnes of fuel – come from Europe and elsewhere and, too big to enter port, moor offshore.
Nigerian companies charter smaller tankers – holding 5,000 to 10,000 metric tonnes – to ferry the fuel from the mothership to depots onshore, from where it is distributed to filling stations.
Because the imports are subsidised by the government, fuel is cheaper in Nigeria than in Benin, Togo, Cameroon, the Central African Republic, Chad and Niger.
Investigation into the subsidy scheme exposed mindless corruption. For example, the government pays subsidy on 59 million litres of fuel per day, yet domestic consumption is only 35 million litres. About 24 million litres are stolen a day, diverted and sold in neighbouring countries.
A report by the International Crisis Group shows that in Benin Republic, petrol smuggled from Nigeria was about 5 per cent of national consumption in 2000. In 2011, the figure rose to 95 per cent.
Every day, large wooden boats offload contraband fuel in plastic jerry cans on isolated beaches around Grand Popo in Benin and Hilakondji in Togo. There are over 50 other discharge points.
Most people in the crowd at Togo Triangle are mere foot soldiers. Oil traders based anywhere in the world can remotely arrange buys. They only have to charter a tanker and provide the vessel owner and captain with technical information: where and when to pick up and offload cargo and how much.
Ship owners, captain and crew may never know the seller’s or buyer’s identity or the cargo’s provenance.
The thriving illegal trade of refined petroleum products creates strong incentives for piracy. Pirates target the large amounts of cash used for illegal deals, as well as the fuel, which they can then sell on the black market.
The addition of piracy into the equation makes Togo Triangle a very dangerous place to go, day or night.
The ability of pirates to target tankers carrying out a ship-to-ship transfer shows that hijackers are well organised and connected, and often know beforehand that a transfer is going to take place. It is said that they use traders and prostitutes as spies.
When a tanker Energy Centurion was hijacked, the pirates had a shoot-out with the Togolese navy and still went away with the vessel and its content.
Back in Lome, this reporter was told that over 800 Nigerians are languishing in jail in that country. All of them are illegal migrants fleeing the economic hardship and a lack of basic infrastructure and opportunities in Nigeria.
Novinyo disclosed that many rich Nigerians, among them corrupt government officials and oil thieves, are buying up hotels and luxury homes in Benin, Togo and Ghana.
TheNiche contacted NNPC General Manager (Public Affairs), Ohi Alegbe, to comment on the report. He said he would investigate and get back to us.
But he failed to do so at press time.
• This investigation was made possible with a grant from Wole Soyinka Centre for Investigative Reporting.