Let The Brickbats And Revisionism Stop

I read a write up titled: ‘PART OF THE SHADOWY TRANSACTIONS INHERITED BY PBAT’ (presented under my response) and I’m dutifully compelled to respond.

While trying to understand the purpose of the write up, even as no source was cited for the information it presented, going by the write up, we (Nigeria) via the NNPC under the Buhari Administration inherited and were carrying $3.5B in debt liability which was “tied to 20,000 daily production from OML 119 for 12 years under an SPV named PXF1( 5 years) and PXF2(7 years).”

“12 years” meant all through the 8 years of the Buhari administration from 2015 to 2023.

From the write up, in 2020, at the height of COVID 19; “(NNPC) had to make a pre payment plan of $1.5 billion with Matrix and Vitol” which “repayment was going to be from daily production of 30,000 barrels of crude oil” …. that would “run for 5 years under an SPV called Project Eagle.”

Furthermore, the write up alleges that, “the daily 30,000 barrels of crude oil given to Matrix and Vitol for their “loan” of $1.5 billion during Covid 19, (in 2020 as alleged) is what is taken to Malta, refined/blended (to be cheaper) and sold to Nigerians”.

First To The Malta Claim …

How do we reconcile data from ‘Trade Map’, a global database on international trade statistics which was equally quoted by ‘Statisense’, stating that between 2017 and 2022, there was zero petroleum products imports from Malta to Nigeria?

As a matter of fact, based on the Trade Map data, the values of Nigeria’s petroleum products imports from Malta for a 10-year period between 2013 and 2023 are as follows:

2013 – $47.5M
2014 – $59.98M
2015 – $117.01M
2016 – $13.32M
2017 – 2022 – $0
2023 – $2.08Billion.

This clearly puts a huge hole in the claim in the write up that; “the daily 30,000 barrels of crude oil given to Matrix and Vitol for their “loan” of $1.5 billion during Covid 19, (in 2020) is what is taken to Malta, refined/blended (to be cheaper) and sold to Nigerians”.

As the record shows (I’d like it to be countered), there was no import of refined petroleum products into Nigeria from Malta between 2017 and 2022.

Indeed, the data above shows that from 2015 when the Buhari Administration came to power, petroleum products importation from Malta gradually, drastically and deliberately reduced from $117.01M in 2015 to $13.32M in 2016 to zero from 2017 – 2022.

The importation of petroleum products from Malta only resumed in 2023 and to the tune of $2.08Billion when Buhari had left office.

So the writer might need to cook a more plausible story in a bid to explain the current Malta situation.

The write up concluded by stating that; “by the end of 2024, the 12 year deal to repay $ 3.5 billion will end” and “by the end of 2025, the 5 year deal to repay Matrix and Vitol their $1.5 billion will also end”.

Crude For Cash Deals Continue …

While I find it difficult to accept the information presented in the write up by virtue of some obvious holes in it, it bears reminding the author that in June 2024, in what was referred to by Afreximbank as “the largest crude-backed facility in Nigeria and one of the largest syndicated debts raised in Africa”, the regional bank, completed a $3.3 billion crude oil-backed prepayment facility to the NNPCL.

The deal tagged “Project Gazelle” is intended to support the “government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market”. We (Nigeria) will pay an interest of 11.85% per annum on the “pre-export finance facility” (PxF).

Project Gazelle Funding Ltd (PGFL), a special purpose vehicle (SPV), incorporated in Bahamas for the PxF, is the borrower while the NNPC is the “sponsor” and will pay with crude oil to the SPV to liquidate the loan. Under the deal, the NNPCL is required to prepay future royalties and taxes to the federal government.

Under ‘Project Gazelle’ we (Nigeria) pledged a total of 164.25 million barrels of crude oil, at 90,000 barrels per day (bpd), starting from 2024 to repay the loan.

Summary …

Going by the write up, the Buhari Administration inherited a $3.5B liability under a crude for debt deal entered into by the NNPC in 2012 before the Administration came to power in 2015.

The write up also states that an additional crude for debt deal of $1.5B was entered into by the NNPC in 2020.

It means (without conceding) that the Buhari Administration was repaying an inherited $3.5B liability (from 2012) and an additional $1.5B liability (from 2020) entered into by the NNPC under its watch.

It is also clear from facts that the NNPCL under the current administration in June 2024 entered into a $3.3B crude for cash deal (Project Gazelle) for which it pledged a total of 164.25M barrels of crude oil, at 90,000 barrels per day, starting from 2024 to repay the loan.

Furthermore, going by the write up (again without conceding), it means that after we (Nigeria) exit “the 12 year deal to repay $3.5 billion” by the end of 2024″ and “the 5 year deal to repay Matrix and Vitol their $1.5 billion deal by the end of 2025” (both of which we have already significantly paid down under the Buhari Administration, going by the timelines presented in the write up), we will still be repaying the $3.3 Billion AFREXIMBANK deal just entered into by the NNPCL at an interest rate of 11.85% per annum and 90,000 barrels per day of crude oil.

From the write up, the NNPC under Buhari, for a period of 8 years entered into a $1.5b crude oil-backed deal while under the current administration it has already entered into a $3.3B crude oil-backed deal.

From the foregoings, is it then fair and right to accuse former President Buhari of selling our crude oil in advance and to blame him, as some people are doing, for us not making any monies from crude oil sale (which is not true by the way).

The truth is that, we are in a dire situation which of course didn’t start today nor in 2015 either. Neither was it caused by or solely by Buhari, as we can see.

It would help if we doubled down on addressing these issues, and finding effective ways to solve them, first by stating the accurate facts and truths and by accepting responsibility as affects each player.

That definitely won’t be achieved by scapegoating the last administration or indeed the immediate past president Muhammadu Buhari.

Indeed, one can effectively argue that the current administration inherited a ‘better’ (crude oil/petroleum products) situation than the Buhari Administration did in 2015.

I made this response out of a sense of responsibility, to interrogate the facts and set some records straight.

As a supporter of both the outgone Buhari-led APC administration and the current Tinubu-led APC administration, I find the current brickbats, and attempts at disinformation and revisionism very discomforting and counterproductive to the nation. Hence my sense of obligation to always set the records straight where I can to the best of my ability.

I would be glad to get further factual information and feedback on this.

18th August 2024

“READ TO THE END ….PART OF THE SHADOWY TRANSACTIONS INHERITED BY PBAT…….(FROM MY INBOX)

Matrix/Malta:- I will make this as concise as possible but it’s a whole lot.

Since year 2000, Nigeria’s subsidy was already taking a toll on the economy and a strain on NNPC’s balance sheet and increasing their debt liability.

In 2005, NNPC decided to mortgage the oil production(20,000 barrels per day ) from OML 119 as debt repayment to offset the debt.
OML 119 is an offshore asset and contains 2 fields-Okono and Okpoho Fields. OML 119 was also chosen because it is 1 of 8 OMLs where NNPC have 100% equity.

Since 2005 till date, sales from OML 119 have not been remitted to federation account, instead it has been used to offset all manners of debt including subsidy payments by NNPC.

In 2012, the debt from NNPC had build up to $8.5 billion.
$5 billion which was the dividends from NLNG was used as part payment, while the remaining $3.5 billion was tied to 20,000 daily production from OML 119 for 12 years under an SPV named PXF1( 5 years) and PXF2(7 years).

In 2020, at this height of COVID 19, Nigeria had shortfall of revenue, NNPC had to make a pre payment plan of $1.5 billion with Matrix and Vitol. Repayment was going to be from daily production of 30,000 barrels of crude oil from another OML in which NNPC has 100 % equity, and it will run for 5 years under an SPV called Project Eagle

The daily 30,000 barrels of crude oil given to Matrix and Vitol for their “loan” of $1.5 billion during Covid 19, is what is taken to Malta , refined/blended ( to be cheaper ) and sold to Nigerians.

By the end of 2024, the 12 year deal to repay $ 3.5 billion will end.

By the end of 2025, the 5 year deal to repay Matrix and Vitol their $1.5 billion will also end.

It is well. That is all I have to say.

©️ Daddy Julius Olaposi Oluwarotimi Owolawi”

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