Off-spec Fuel: Distilling Emadeb’s Position

Emmanuel Addeh writes that despite its name consistently cropping up concerning the current controversial issue of imported substandard petrol into the country, Emadeb Energy’s explanation of its role or the absence of it in the ongoing saga appears to be clear and straightforward.

It started like hush-talk, but by the time the media beamed its searchlight on the rumoured importation of petrol that was causing damage to vehicles across a number of states in Nigeria, there was no doubt that something had seriously gone amiss in the product supply chain.

By then pockets of queues had started building, especially in Abuja and surrounding states as well as in Lagos as a result of the disruption which was becoming more pronounced by the day.

The authorities, including the two major actors, the Nigerian National Petroleum Company (NNPC) and the Nigerian Midstream/Downstream Petroleum Regulatory Authority (NMDPRA) would not make any public statement on the matter.

Pressure had begun to build; Nigerians were beginning to get agitated. They wanted to know what exactly was happening and why when most Nigerians had thought that the era of long fuel queues were over, it was suddenly creeping back.

But buckling under pressure, on the night of Wednesday February 9, the NNPC, which is solely in charge of importation of the product made some revelations, and for the first time admitted that something had gone terribly wrong with some cargoes of fuel imported into the country.

The NNPC went further to mention the names of some business entities it thought brought in the product.

Group Managing Director/Chief Executive Officer of the national oil firm , Mele Kyari, in the broadcast, listed the firms as Duke Oil, its own oil trading arm, MRS, Oando and a conglomeration of companies, known as the Emadeb/Hyde/AY Maikifi/Brittania-U Consortium.

The fuel imported from Antwerp in Belgium, he said, was found in circulation in late January, precisely on the 20th of that month when the NNPC received a report from its quality inspectors on the presence of emulsion particles in cargoes shipped to Nigeria from the European country.

While other firms have, as expected, denied importing off-spec petrol as the product was certified by the regulator, Emadeb’s case appears pretty different: As a consortium, it was never involved in the importation of the product into the country at all.

A Profile in Integrity

Emadeb Energy Services Limited is a wholly indigenous private company incorporated in 2007 and commenced business in 2008. Since coming on stream, the company says it has grown to become one of the leading oil and gas entities in Nigeria. It’s now fully involved in the upstream, midstream and downstream.

“As one of Nigeria’s dynamic and innovative energy companies, we have over the years built a reputation of proactively meeting our customers’ needs and surpassing their expectations through our specialised and differentiated products and services.

“At Emadeb Energy, we conduct all our businesses in strict compliance with all relevant national and international legislation and regulation. A strong compliance culture is important to our success,” it adds.

The brainchild of the Managing Director/Chief Executive Officer, Mr. Adebowale Olujimi, the company states that its desire is to make petroleum products available at competitive rates to bulk buyers who would in turn retail the product.

“The objective is to provide a better and sustainable option for small and medium scale operators in the downstream sector to navigate the obstacles in the path to sourcing these fuels at profitable rates by streamlining delivery logistics,” Emadeb notes.

Its 45 million litre tank farm located at Ijegun Egba, Amuwo Odofin area of Lagos state, South West Nigeria, was commissioned in the first quarter of 2014 with the capacity to store 30,840,000 litres of petrol, 7,122,000 litres of diesel and 7,122,000 litres of kerosene.

It has a private dedicated jetty which enhances timely discharge of products thereby eradicating congestions and delays, plus several gas plants, including the one located in the Federal Capital Territory (FCT), Lagos as well as other parts of the country and had recently successfully bid for and won OML 70, formerly belonging to ExxonMobil.

In addition, Emadeb has 12 loading arms with capacity to load an average of 100 to 120 trucks per day, a fully automated loading system that can monitor activities from any part of the world and a world class laboratory for quality checks on all cargoes received.

Since it was founded, the company states that it has never been involved in any dealings that run contrary to the law.

Company’s Reaction

But the company in a reaction after the NNPC accusation, put the blame on a member of the consortium, Britannia-U, saying the firm had long operated independently and bore full responsibility for the purchase.

In a statement, Emadeb stated that it was not involved in any way in the importation of the problematic fuel, but that it was solely imported by Britannia-U, a hitherto member of the group, which had refused to work together with other members of the consortium.

Emadeb stated that the said importation of the contaminated Premium Motor Spirit (PMS) was executed by the company without the involvement of other members.

It argued that the blanket claim made against the consortium by the NNPC was misleading and contradicted the actual events that happened and did not fully reflect or represent what transpired.

“We also deem it necessary to protect our image as we have invested a lot in building our respective brands in the industry,” it noted.

According to other members of the consortium, Brittania-U Nigeria Limited was the sole supplier of the 90,000MT of PMS delivered via MT Torm Hilde with laycan January 2 to 4, 2022.

“At the formation of the consortium in May 2021 by NNPC, Brittania-U refused to execute the Service and Consortium Agreement submitted to NNPC in fulfilment of the award of the DSDP Contract.

“Emadeb as the lead of the Consortium engaged Brittania-U severally and it insisted on dealing with NNPC independently. NNPC was expressly notified about this by the other consortium members via a letter dated June 2, 2021,” it said.

According to the other members of the consortium, Brittania-U vehemently refused to execute the consortium agreement with the other consortium members, frustrating every attempt to make it do so.

The consortium insisted that Brittania-U had communicated all her actions to the other consortium members as well as the NNPC harping on its preference to perform a sole contract for crude lifting and PMS supply under the DSDP arrangement.

It noted that Brittania-U’s chose to be solely liable under her supplies to NNPC and in the light of which she indemnified the other consortium members and failed to accept the nominated international partner agreed by other consortium members.

“Following the repeated refusal of Brittania-U to work with the consortium, Brittania-U indemnified the other consortium members and the resulting agreement was executed by their company on June 16, 2021,” Emadeb stated.

In a letter dated December 10, 2021 Emadeb noted that it also informed NNPC of non-receipt of information from Brittania-U on all correspondence relating to the DSDP crude cargo allocated to them.

Appearance Before House of Reps

A few days after the issue became public knowledge, the House of Representatives invited the Emadeb consortium to defend itself. Testifying before the panel, the leader of the consortium, Olujimi insisted that Emadeb was unaware of the transaction, insisting that Britannia-U handled the importation.

“The consortium was awarded the DSDP contract on June 22, 2021 by NNPC. The delivery of the petroleum product and crude lifting have been done strictly on a rotational basis by the respective consortium members.

“Some of the consortium members-Emadeb/Hyde and AY Maikifi immediately engaged a reputable international company for delivery of all PMS cargoes and prompt loading of crude oil; while Brittania-U chose to engage a different entity for her own supplies.

“Brittania-U also preferred to liaise directly with NNPC and took responsibility for all her transactions without recourse to the other consortium members. The other consortium members-Emadeb/Hyde and AY Maikifi-have successfully delivered 270,000 Metric Tonnes (MT) of Premium Motor Spirit (PMS), while Brittania U also delivered 90,000MT PMS.

“The PMS alleged to be methanol-blended was solely delivered by Brittania-U via MT Torm Hilde in January 2022.

“The other consortium members-Emadeb/Hyde and AY Maikifi- were not privy to the arrangements for the delivery of the aforementioned PMS and documentary evidence relating to the PMS,” Olujimi maintained.

Olujimi who addressed the panel on behalf of the consortium, however applauded the NNPC for its foresight in putting together and supporting the consortium to manage the DSDP agreement which he said was geared towards eliminating product scarcity in the country.

He reiterated that one of the parties in the contract, Brittania-U went outside the agreement and initiated communications with the NNPC without the knowledge of others, and without notifying the NNPC that it wasn’t representing the consortium, as a result of which it got the deal and imported the product said to be laden with methanol.

“It is worthy to mention that Brittania-U should be allowed to provide all answers to the controversy surrounding the importation of the PMS product,” he noted.

Britannia-U in its defence, did not deny knowledge of the deal, neither did it contradict the position of Emadeb and other members, but said that the product was duly certified okay by the authorities.

Chief Executive Officer of the company, Uju Ifejika maintained that her company had done no wrong as it only brought in what was specified by the NNPC in the contract.

She added that necessary quality control tests were carried out at every turn by NNPC, NMDPRA experts alongside those from her company with clearance certificates issued and the products successfully handed over to the NNPC.

For now, the Chairman of the House Committee, Ahmed Gaya (APC, Kano), has said that after going through the documents presented, the lawmakers would invite the companies back if there’s anything to verify.

However, as the matter continues to linger, the company says it remains untainted by the controversial importation, sticking with its story that it had absolutely nothing to do with it.