GHS 23m BOST Saga: COPEC Demands Probe

The Chamber of Petroleum Consumers (COPEC) has called for a probe regarding the sale of crude by the Bulk Oil Storage and Transportation (BOST) Company Limited to BB Energy Company resulting in a loss of some GHS 23m to the state.

Executive Secretary of COPEC GH, Duncan Amoah who issued a press statement on Monday 12 March in relation to the development said: “One is left wondering what could have informed the current BOST to undertake such a poor wasteful transaction leaving the company with a net loss of over GHS 23million.

COPEC GH has therefore urged the Economic and Organised Crime Organisation (EOCO), Police CID, the Bureau of National Investigations (BNI) and the Office of the Special Prosecutor(SP) to take up the matter to unravel the circumstances and details regarding the sale which COPEC GH believes was a rip-off.

Below is the full statement:
CHAMBER OF PETROLEUM CONSUMERS-GHANA

INVESTIGATE BOST MD IRO OF LOSS OF OVER GHS 23MILLION FROM SALE OF CRUDE

The Chamber following from extensive checks, consultations and further independent investigations on the infamous sale of about 1.8million barrels of crude by the current Managing Director is calling for an immediate forensic investigation by the appropriate state agencies to immediately arrest and rectify a whooping loss of over GHS 23million from this single transaction.

The Managing Director of the Bulk Oil Storage and Transportation (BOST) in the month of September 2017 undertook to sell off almost two parcels of crude estimated to be around 1.8milllion barrels at a discount of $2/ barrel.

The qua-iboe crude product which had been stored in the tanks of The Tema Oil Refinery (TOR) since December 2016 which was sold by the Managing Director of BOST at the time of the sale in September 2017 was obviously on a rebound and had peeked from around the $50/barrel region to all the way above $70 as of January.

Per internationally accepted pricing as captured by Citac, this same qua-iboe at free on board (FOB) was selling around the world at Brent plus $0.82/barrel but the BOST MD decided to sell this product at Brent minus $2/barrel though all other costs to bringing a crude parcel from which ever destination into a tank had already been paid for, barring all the other charges lost per the infant position, the face value or loss per this transaction alone is in excess of over $5.3million.

It is instructive to also note that the purpose for the importation of that parcel of crude by the previous Management of BOST to enable the Tema Refinery get busy by processing the crude into various products was simply ignored in this transaction with the excuse that other debtors of BOST were demanding monies owed them.

This fictitious crude transaction just like other transactions of the current MD was done without any recourse to proper laid down process and procedures nor with any involvement of even the holders of the crude -TOR.

TOR is on record to have rather found out about the sale and transfer of the crude to its new owners after almost 2 months of the transaction when the refinery had indicated it was ready and set to start processing same as per the earlier arrangements, a letter sent to BOST on this has up to this day not been responded to.

The BB Energy Company which bought this crude is known to be also unlicensed to engage in such in-tank transactions but the BOST MD went ahead to sell to them without any problem at all though the product has been subsequently processed from same tanks without any charges thereon.

BB Energy subsequently made attempts to also sell same parcel of crude to another company due to the very low rate it acquired the products and had to be eventually stopped by the Refinery from transacting same which forced it to now process same with the refinery at a Tolling of $3.5/barrel instead of the minimum tolling of around $4.5/barrel thereby leaving the refinery worse off by $1/barrel also.

Even with the absurd discounts extended to this BB energy company, payment for the crude is as at today hanging in limbo with some $2.1million outstanding according to BOST itself, even though processing and sale of the product has already commenced and full payment should have been affected on or before the final transfer.

One is left wondering what could have informed the current BOST to undertake such a poor wasteful transaction leaving the company with a net loss of over GHS 23million.

The Tema Oil Refinery has also had to lose a minimum of $1/barrel or some Ghc8.1million following from this transfer of the products to the BB Energy company as the previous tolling arrangements between BOST itself and other importers was working with a tolling of $5/barrel.

Several other mind boggling issues surround this transaction and indeed leave many more questions than the answers so far provided by a press release from BOST on the 22nd of February 2018.

We call on the Economic and Organised Crime Organisation (EOCO), Police CID, The Bureau of National Investigations and the Office of the Special Prosecutor to as a matter of urgency delve into this apparent shady transaction that has caused financial losses to both the state and BOST Itself.