COPEC Petitions Special Prosecutor – Wants 1.8m Crude Oil Sale by BOST Investigated

The issue of the alleged sale of some 1.8 million barrels of crude oil by the Bulk Oil Storage and Transportation (BOST) Company to two unlicensed oil companies at discounted prices does not seem to have ended.

The Chamber of Petroleum Consumers (COPEC) that raised alarm bells about the purported sale of the oil has hit back at BOST and even raised the matter to a higher level by petitioning the Office of the Special Prosecutor (OSP) to investigate it.

Addressing a press conference in Tema yesterday, the Executive Secretary of COPEC, Mr Duncan Amoah, called the attention of the OSP to the issue and called on the office to investigate the sale and sanction those found culpable in the purported illegality, which cost the country huge sums of money.

Sale

He said the sale of the product, which was being held in storage facilities at the Tema Oil Refinery (TOR), to BB Energy at discounted prices under free-on-board (FOB) arrangements amounted to fraud.

At a press conference held in Accra on Wednesday, March 14, 2018, BOST had stated that it sold some 942,000 barrels of the said crude oil at an average discount of $5 per barrel, thereby saving the country a loss of $3 per barrel.

But COPEC discounted the claim, calling on BOST to make a disclosure of the quantities that were sold to both BB Energy and AOT, another trading company.

Mr Amoah appealed to the OSP to investigate and unravel the relationship that existed among the individuals who were engaged in the transaction, BOST and the unlicensed companies.

The crude oil in contention is said to have been secured from the Tweneboa, Enyera and Ntomme (TEN) fields by BOST between December 2016 and January 2017 for TOR to process.

However, the refinery was unable to do so, following an explosion which damaged a newly installed furnace (crude oil heating plant) around the same period.

Mr Amoah was of the view that the entire process of the sale of the crude oil to BB Energy and AOT in September 2017 was shrouded in secrecy.

He wondered why BOST hurriedly disposed of the product to an entity which only sought to acquire a permit for the purchase in December 2017 when TOR, at the same time, was about to complete the maintenance of its processing plants to enable it to process the crude oil.

Why FOB

He also expressed worry over the use of the FOB transaction when the crude oil was already at the refinery.
BOST, he said, had argued that using the FOB arrangement was to waive off freight and insurance for the buyer to cater for those costs.

He said at the time of the sale of the crude oil for the pittance, the price of crude oil was rising on the international market, for which reason BOST could have exercised some discretion, since the product was not considered to be in distress, demanding the need for BOST to sell it at a low price.

Licensing

He also wondered why BOST would arrogate to itself the power to trade in crude oil when it did not have an oil trading licence (OTC) from the National Petroleum Authority (NPA), the regulator, to that effect.

“It is even more worrying to hear the management of BOST arguing that BB Energy does not require a licence to purchase the crude oil from BOST,” Mr Amoah stated.

He argued that in crude trading, for a company to buy in-tank crude, it was required to obtain a licence from the regulator in any country where such a purchase was being done.

He said going by the argument by BOST that the crude oil could go bad, an open tender or transfer of ownership module could have been adopted to dispose of the crude.

Source: Graphic Online