Taleveras winds down Duke/NNPC oil swap arrangement

Taleveras group a leading Nigerian oil trading and integrated energy solutions provider says it has begun to wind down the oil swap arrangement it entered into with Duke Oil incorporated on behalf of the NNPC.

 

This comes as 138 million litres of petrol has arrived Lagos ports which is expected to ease the ongoing shortages of the product.

Taleveras Petroleum Trading BV, in February 2011 entered into a Management and Operation Agreement with Duke Oil Incorporated to operate and manage its Crude and Product Exchange Agreement with NNPC/PPMC from February 2011 until December 2014.

Taleveras Petroleum Trading BV had no direct contract with NNPC/PPMC as it relates to the Crude and Product Exchange Agreement. 

This management and operations agreement with Duke has expired and was not renewed by either party; sources close to the deal tell BusinessDay.

“Taleveras shares in the present government’s policy of developing a well sustained and fair Oil and Gas industry and has stayed guided by this principle in all it dealings. Taleveras therefore welcomes all inquiries as it relates to the Crude for Product Exchange Agreement,” Ovie Akpovwa, Manager Taleveras Public Affairs, said. 

The Crude for Product exchange process is a barter arrangement, which means crude is loaded in exchange for refined petroleum products, mainly gasoline.

Sources familiar with the process tell BusinessDay that the Crude for Product Exchange Agreement does not involve the supply of bye products, as there is no refining of the Crude Oil involved.

“The Crude for Product Exchange contract is value for value driven and a reconciliation exercise is held regularly to determine over deliveries and under deliveries, as it relates to each party’s position,” the source said.

The Crude for Product Exchange Agreement entails that a Standby Letter of Credit (SBLC) is issued before any vessel is cleared to load the crude oil, which means that at all times, there is an underlying security, and if products are not delivered, this SBLC can be cashed.

Sources say that upon the non-renewal or extension of the agreement in the fourth quarter of 2014, Taleveras made a case in writing for its final reconciliation to take place urgently.

On 5-8 May 2015, this reconciliation exercise finally occurred and Taleveras reconciled its accounts and now has in its possession a signed off Reconciliation Statement to this effect.

Consequent to this reconciliation, Taleveras will be delivering 3-4 cargoes of gasoline in June 2015 to wind down the arrangement completely.

Documents seen by BusinessDay show that, Taleveras has nominated  a numnber of vessel cargoes as part of its winding down activity in June. now and end of June. The firm

In delivering the products all demurrage cost are re-reimbursable as this is the cost of waiting time a vessel takes to deliver her cargo to PPMC, Vessel, Jetty/Depot or assigned facilities.

Also NNPC/PPMC, PPRA, NPA, Customs, the Navy and NIMASA, inspectors are among agencies that meet vessels on arrival to commence formalities and record taking.

Sources further say that under the Crude for Product Exchange Agreement, delivering companies have no recourse to subsidy claim, nor receive any subsidy on products delivered, meaning Taleveras has never received any amounts under the subsidy scheme.

Taleveras is one of the best placed Nigerian energy groups because of their strong financial firepower with combined lines of credit in excess of $2 billion.

The firm has been actively trading in the African Region and International Markets since before 2001, with a strong trading presence with personnel located across West Africa and internationally, and senior management personnel made up of former employees drawn from global investment banks, major refiners and several large international trading houses.

In January the government of Equatorial Guinea signed an agreement with Taleveras Group, to build an oil storage hub in country. 

“The Bioko Island facility will have a total capacity of 1.34 million tonnes of storage for crude oil and products such as gasoline, naphtha, jet fuel and fuel oil. It will be the largest crude and products storage facility in Africa,” they said in a statement then.