Trafigura Private (Pte) Limited, Monday, stated that it paid $4.3 billion, about N860 billion to state entities in 2013, with the Nigerian National Petroleum Corporation, NNPC, receiving $2.5 billion, $2.5 billion of the payment.
Trafigura Private (Pte) Limited, Monday, stated that it paid $4.3 billion, about N860 billion to state entities in 2013, with the Nigerian National Petroleum Corporation, NNPC, receiving $2.5 billion, $2.5 billion of the payment.
The disclosure, according to the company’s Responsibility Report, is part of a push towards more transparency, adding that the funds were used to purchase crude oil, refined petroleum products and gas from national oil companies in countries that have signed up to the Extractive Industries Transparency Initiative, or candidate countries.
The company also stated that the payments made in Colombia, Ghana, Nigeria, Norway, Peru, and Trinidad and Tobago, were for an aggregate swap of crude oil and corresponding delivery of refined products from and to national oil companies in EITI countries.
Trafigura said it would continue to review its policy on payments to governments and disclosure under the EITI, noting that currently, it is only disclosing payments to EITI member or candidate countries and only oil-related payments, not for metals, coal or other commodities the firm handles.
Trafigura which is the third largest independent oil trader in the world is also the world’s second-largest metals trader.
Analysts are of the view that the $4.3 billion payments disclosed by Trafigura yesterday are tiny compared with its overall business. In 2013, the volume of crude oil, petroleum products and gas traded by the Swiss-headquartered company amounted to 117.8 million tonnes – or three-quarters of its global turnover of $128 billion.
Trafigura handles about three million barrels of oil equivalent a day. It reported record first-half profit this year of $654 million as it gained from oil-price volatility and storing crude for future delivery.
Trafigura, however, stated that its current report are just a first round of disclosures and just an initial step in an important and evolving process.
The company said, “While our disclosure in 2015 shows that our business with National Oil Companies in EITI implementing countries represents only a small part of our overall product flows, we believe that the encouraging reaction we have received so far from governments, business partners, non-government organisations and the media justifies our decision to help advance this discussion further.
“We have excluded the detail of payments to governments in non-EITI implementing countries because we, like other EITI supporting companies, see little merit in unilateral disclosure in countries that have no multi-stakeholder process comparable to the one developed by the EITI that commits all relevant players within the country, including the government, to report in line with an agreed format.”
Commenting on Trafigura’s report, Oliver Classen of the Berne Declaration, a Swiss Non-Governmental Organisation (NGO) said, “While the number of countries covered and the level of granularity of the data are still rather disappointing, we welcome this transparency effort as a
first step in the right direction.
“The report proves how easily and swiftly a disclosure of payments could be done by Trafigura’s competitors. The Swiss government should include commodity trading in a pending transparency law.”