Investigate BOST MD Over Gh¢23million Loss

From Crude Oil Sale To Another Unlicensed Company – COPEC

The Chamber of Petroleum Consumers, Ghana (COPEC), has called for an independent investigations into the sale of 1.8million barrels of crude oil by the Managing Director (MD) of Bulk Oil Storage and Transport (BOST), Alfred Obeng and revelations that, a whooping Ghc23million was lost from this single transaction with unlicensed company called, BB Energy of Britain.

Duncan Amoah, the Executive Secretary of CopecGhana in a statement sent to The Herald demanded that, the appropriate state agencies launch an immediate forensic investigations into the transaction, adding “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”.

“We call on the Economic and Organized Crime Office (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”, the statement demanded.

The Herald, has been on the beat with this transaction since last year, but many attempts by the BOST management to explain, never made sense.

Indeed, there have been contradictions in the claims of the MD and the Media Relations Manager, Nana Akua Adubea Obeng.

The contradictions, had been about the quantity of the crude oil sold, the amount of money BOST realized from the sale and whether the money had been lodged in the accounts of BOST.

While, the Media Relations Manager in her statement said, the exact quantity ascertained by trading department, the Tema Oil Refinery (TOR) and BB Energy was 942, 000 barrels, Mr. Alfred Obeng, in a short interaction with The Herald in his office recently, said the crude oil sold to the British company was a little over 1.800 million barrels.

Again, whereas the MD told The Herald that, the full amount had been paid, the Media Relations Manager, Nana Akua Adubea Obeng, said the buyers still owe BOST some outstanding amount since last year.

Ms. Obeng, revealed that, although the crude oil was sold as far back as September 2017, BB Energy, was yet to pay BOST over US$2. 178 million.

She made the disclosures in a statement she signed in reaction to The Herald’s publication about two weeks ago, detailing the transaction and reports that BB Energy of Britain, still owes BOST some huge amounts.

But ahead of her statement, the BOST MD, Alfred Obeng, had invited this reporter to his office and in the presence of two individuals; Nat Acheampong, who works with BOST and a top officer of the Ghana Journalists Association (name withheld) and attempted to answer questions on the transaction, looking ill-prepared.

Mr. Obeng, told this paper that, there were two transactions between BB Energy and BOST, adding that over 1.8 million barrels of crude oil was involved contrary to his Media Relations Manager’s statement.

During the interaction, the BOST MD, confirmed inheriting the 2 million barrels of crude oil from the previous management headed by Kwame Awuah Darko, but added that he had to urgently sell the crude

to defray a huge debt BOST owed British Petroleum (BP).

He explained that, BP, had sued BOST over the debt and that his colleagues and him, had to quickly dispose off the 2 million barrels of crude oil to BB Energy to cut its losses.

This happened because TOR, could not process the crude oil into fuel due to the collapse of some of its equipment early 2017. This got BOST, to renege on its planned payment schedule with BP.

A Letter of Credit (LC) issued BP, could also not go through, while an amount BOST, was expecting from the Energy Sector Bond through the Finance Ministry, also did not come, leaving BOST in a desperation situation.

Meanwhile, the Media Relations Manager in her statement, claimed that BOST in the September 2017 transaction got $51, 386, 100, adding that BOST, sold the crude to BB Energy as “Freight On Board” (FOB).

The statement explained that as “FOB, BOST gave a discount of $2 per barrel leaving us with $54.55 per barrel, adding “BOST is, therefore, surprised to hear that at the time of sale, the world market price was $62 per barrel, which is not true”.

She claimed that, out of the $51, 386, 100 realized from the 942,000 barrels, $27, 208 016.13, out of the amount was paid to British Petroleum (BP), while $15, 000.000, was also paid to Mocoh Energy.

Nana Akua Adubea Obeng’s statement, said BB Energy, paid $7, 000.000 into BOST current account in Ghana with Universal Merchant Bank (UMB) at the head office, adding this could also be verified.

She also claimed that, the finance department of BOST, had done the accounting and issued the final invoice to BB Energy.

The statement said, BB Energy was left with $2, 178, 084 to pay BOST, as final payment to close the transaction and that the final invoice was always done, when the final and total product was discharged or taken from the tank, where the exact quantity was determined on the outturn report as certified by a third party.

According to Copec Ghana, its demand for investigation, following extensive checks, consultations and further independent investigations, on the sale of the crude oil by the current Managing Director.

“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”.

It said “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”.

It added that “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”.

The statement signed by the Executive Secretary of CopecGhana observed that “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”.

Mr. Amoah’s statement insisted “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”.

The statement disclosed that “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”.

It revealed that “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”.

Copec Ghana added that “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”.

It said that “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”.

According to Copec Ghana, “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 Ghc23million”, adding “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”.

It charged, there “several other mind boggling issues surround this transaction and indeed leaves many more questions than the answers so far provided by a press release from BOST on the 22nd of February 2018.

In this regard, “we call on the Economic and Organized Crime Office (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”.