45,000 Barrels per day Crude Oil is NOT worth US$2.5 million

By Professor Mwiine Lubemba

Dr. Austin Sichinga is some sort of soil expert and was the Chief of Staff and says he edited Mr. Rupiah Banda’s letter to some Nigerian President of sort where Banda was asking for 45,000 barrels per day of crude oil? And we suppose Mr. Banda’s request was addressed otherwise he would not be in the box.

What’s wrong with these people?

First of all, Nigerian oil refining capacity is low and so it imports most of its refined products to meet domestic demand. And as a by the way, Nigeria produces only high value, low sulphur content, light crude oils – Antan Blend, Bonny Light, Bonny Medium, Brass Blend, Escravos Light, Forcados Blend, IMA, Odudu Blend, Pennington Light, Qua-Iboe Light and Ukpokiti. It means Zambia was to import any of these crude blends.

Now, Zambia consumes 16,000 barrels of refined finished petroleum products per day may be higher now say 17,000 per day. These 45,000 barrels per day would seem too high, almost 3 times more than we need even if the recovery ratio is upped to 45% (20,250 barrels per day) of finished white petroleum products from this light Nigerian crude and besides our Indeni cannot handle crude oil as we know already. It would mean sending this parcel to some contract refinery somewhere and bring it back to Dar.

In any case if this parcel was indeed finally given/sold or whatever and was then exchanged for refined petroleum products or resold, we would expect Austin Sichinga was intelligent enough to advise Mr. Banda to demand full value for the remaining 55% consisting more valuable crudes that are used in manufacturing chemicals such as fertilizers, surfactants, and agro chemicals etc.

We also seem lost at the figure being floated of US$2.5 million as the total proceeds from the crude oil purchased/gift/gratification or whatever that Mr. Banda’s son is then supposed to have banked in Indonesia.

Why?

We know crude oil prices were oscillating between US$97-US$104 per barrel throughout 2009 and 2011, so we would expect this gift or whatever was worth between US$4,365,000 and US$4,680,000 per day for the duration of the gift/contract or whatever and not this figure of US$2.5 million that Mr. Luhila claims he suspected was stashed in some brown/khaki envelope that Mr. Kachingwe was then supposed to bring back to Zambia in his brief case. Mr. Austin Sichinga as Chief of Staff and advisor to President Banda should have insisted and advised him to do the right thing and just leave this money at some Bank in Nigeria that has a branch in Zambia from where he would be drawing his loot as when he needed it. Mr. Sichinga must surely have known that you can’t move more than US$10,000 in cash without raising some alarm bells in Washington.

In addition, why would Mr. Banda trust Mr. Richard Kachingwe to go and carry such an amount of money even if it was just a few cents when he could have boarded his Challenger Jet at 6 AM and flown in and out of Lagos and would have been back before sunset? Or why didn’t he send his wife, brother or indeed any of his children especially the one who then had to get this money from Kachingwe and fly half way through planet earth to a Bank in Indonesia?

It will be interesting to hear some stupid questions asked and some clever answers in reply in this matter especially from the defence team. Such as what was the duration of the contract/gift? Who went to collect the other amounts of money?

Why do we think, if this is a true story, there was more money?

For example if this free gift, contract or whatever of 45,000 barrels per day was to run for just 30 days we would be looking at the higher end of US$ 140,400,000. This brings in another question— which Nigerian company or President would be as dumb as to give another country’s President that much money? And for what?

And if it was in fact Zambia or Mr. Banda to pay for oil supplied and not delivered to Indeni under the contract why would he suddenly be sending Kachingwe to go and collect cash from the same Nigerians and not from the final recipient of the crude oil? OK if the Nigerians were acting as agents and sold the oil on Mr. Banda’s behalf it means the Nigerians deducted full value for their oil and Mr. Banda only went to collect his commission. It also means the Zambian government did not pay for the oil. It would then mean Mr. Banda begged his counterpart for some oil, which was sold on his behalf by the Igwee brothers and he pocketed the change. Only this time this money didn’t end up in the Zamtroop account. The only crime then would be the use of State House stationery and his Chief of Staff time for begging or maybe conducting personal business while employed as President at State House.

Indeed Nigerian Oil production is currently at 2.5 million barrels per day, using our back of the envelope calculation, the 45,000 barrels represents 1.8% of total Nigerian crude oil production per day. So it couldn’t have been a gift. And with all the thefts that accompany Nigerian crude oil production, only a foolish company/President will accept not to get full value or lose additional margins through silly gifts or unexplained contracts….

If Zambia bought this 45,000 barrels per day through a 30 days term crude oil contract and proposal for solid mineral trade…there must surely be some mine that has reported the theft of some copper wire bars or cathodes somewhere and the Bank of Zambia must have reported a theft or transfer of a total of US$140million plus, for the 30 days crude oil supplies at US$4.87million per day…

Go figure…

Just a thought…

Sincerely,

Share this post