How Swiss firm, linked to Nigerian, made millions in shady Congolese oil deals

Oil cargo used to illustrate the story

A Swiss non-governmental advocacy organisation, the Berne Declaration, BD, has uncovered how the Congolese government is denied millions of dollars from its oil export through a shady deal involving a Swiss oil trading firm, Philia SA.

The investigation also reveals Philia SA’s links to the Congolese President’s son, Denis Christel Sassou Nguessoa, and a Nigerian investment banker, Ikenna Okoli.

The deal mirrors how Nigeria lost over $6.8 billion between 2009 and 2011 through an opaque deal involving the Nigerian National Petroleum Corporation, NNPC, Swiss oil traders and politically exposed fraudsters. The investigation also reveals that just like the NNPC, the Congolese government owned refining company, Coraf, withheld earning from oil sales that was due to the country’s treasures therefore denying the oil-dependent country of needed funds for developmental projects.

For instance, Coraf received 6 million barrels of crude worth over $600 million in 2011 and 2012 and made absolutely no return to the Congolese treasury.  

Though the exact amount of money made by Philia by virtue of this contract is not known, it is believed to be so significant that Philia, the newbie and hitherto small player, immediately expanded its operations into other oil frontiers in Africa such as Senegal and Gabon.  

Philia’s past

Before breaking away into its own independent oil trading activities, Philia was part of a joint venture, known as Petronoir Limited. The venture was formed in notorious offshore tax haven, Bermuda, in March 2012.

According to BD, Petronoir was also engaged in the business of lifting fuel oil and naphtha from Coraf, where Denis Christel serves as the General Administrator. Denis Christel also known as Kiki or Junior is the anointed heir of his father, Denis Sassou Nguessoa, one of the longest serving dictators in Africa.

It is, however, not known if Petronoir’s contract with Coraf was as opaque and included neglect of due diligence and best industry practices like that of its offshoot, Philia.

Philia, which started its own independent lifting of fuel oil and naphtha away from the Petronior consortium in 2013, has 15 employees and one manager, Ikenna Okoli – a Nigerian banker and former Head of Investment at Faisal Private Bank, Geneva.

“Mr Okoli benefits from extensive experience in banking and highly refined competencies in the oil trading sector. He follows the operations behind each transaction,” a source told BD.

Mr. Okoli manages Philia together with the company’s sole shareholder, Jean-Phillip Ndong, who seems to a front for Denis Christel.  Mr. Ndong, a Gabonese, is a teacher turn oil and timber mogul. He owns luxury apartment in Monaco but prefers to live in hotels in Nice, Paris and Geneva, the investigation revealed.

BD revealed that Mr. Ndong, is definitely a Politically Exposed Person, PEP, who has direct business relation with one Yaya Moussa, who himself was instrumental in helping Denis Christel facilitate the launch of foundation, Perspectives d’avenir, in the United States.

Mr. Moussa is also the President of Benin-based, Banque Africaine Pour L’Industrie et Commerce (BAIC). The bank was formed in 2013 and Mr. Ndong was one of its original three directors. The board was later expanded to include Atlantic International SA, a Geneva based oil trading company, and Philia trading pte Limited, which is represented by Mr. Okoli.

A number of sources interviewed by BD claimed that Mr. Ndong and Denis Christel have a close relationship. The duo occasionally spend time together in the South of France. The sources also claimed that some Philia personnel were engaged to provide personal services to Denis Christel such as recruiting staff for his foundation.

Mr. Ndong denied that he has any unusual relationship with Denis Christel. He said he “never recruited nor contacted anyone for Mr Denis Christel Sassou Nguesso’s alleged foundation.” He said he knows everyone that works in the country’s downstream sector and that it is normal for him to discuss with them.

The Dubious Contract; Questionable Clauses
 
Though a minor player, Philia entered the Congolese market with a bang. Coraf granted the firm a term contract renewable after one year to export fuel oil and naphtha. The total oil sold to Philia in its first year was equal to a quarter of all the oil Coraf received that year. In the period Coraf sold five cargoes to Philia, one of them even before the contract came into force. Philia made a turnover of $140 million for the sales.

BD investigation shows that Philia made unusually high margins (between $9.5 and $20.5 per tonne) from its Congolese shipments. A trader in African petroleum told BD that “the margins obtained in Congo are higher than one would expect.”

One of the reason’s Philia made unprecedented margins from its Congo shipments was its involvement in what is referred to as “flipping cargoes” in industry jargon. Flipping cargoes was the method used by briefcase companies owned by PEPs in selling crude bought from the NNPC, as revealed by a 2013 investigation by BD.

By flipping cargoes, Philia did not lift its shipment but instead sold it immediately to a third parties. In fact, the company resold its shipment at the point of purchase in Pointe-Noire, where Coraf refinery is located. Essentially what Philia did was to act as an intermediary with international market by buying product and reselling it at the point of purchase thereby denying the Congolese government earnings it would have made if it sold the product directly on the international market.

The harm caused by flipping cargoes is even more painful when one realises that Philia pays no tax whatsoever to the Congolese government for the transactions despite it being conducted on Congolese soil. Philia pays very insignificant taxes in Switzerland and Singapore, the countries where it is registered.

Though BD says it is hard to calculate the exact amount Philia makes in profit from flipping cargoes, it believes from it analyses that it is substantial and would have represented a huge earning for Congo, a resource dependent country.

Philia also saved cost by not being involved in the physical operations connected to the transactions and its attendant financial obligations. For example, Philia made $400,000 in profit by reselling fuel oil and naphtha directly to third parties at Pointe-Noire in just three transactions in May, October and November 2013.

Besides the opportunity to directly resell the petroleum products to other oil traders, the contract between Coraf and Philia also has other questionable clauses that are overwhelmingly beneficial to Philia but stifling to Coraf and indirectly the Congolese people who lose millions of dollar the country would have used for developmental projects.

First, the contract was obtained without a public tender therefore illegally edging out other competitors. Also, unlike the industry standard that gives oil traders the grace of between 8-10 days after signing the bill of lading to pay for shipments, Philia was granted “no later than 60 days after the bill of lading date” to pay for its shipment in one instance.

Out of seven invoices obtained by BD, Philia was given a payment period of 60 days after loading in one instance. It also got a grace of 30 days in four instances, and 15 days in two other instances. According to BD, these unusually long period given to Philia to pay up meant that it essentially bought the products without making any financial obligations.

“Two senior finance manager from large Geneva-based banks view it as ‘a form of credit’ granted Philia by Coraf, positioning the refinery therefore as the former’s de factor bank. In fact, Philia is able to finance the shipment (and quite possibly others too) for free, thanks to the cash flow that it benefits from during the period between the receipt of the sale to third parties and the repayment of the purchase to Coraf (between 20 and 50 days for these five transactions). In comparison, Coraf must wait much longer to receive its payments than the ‘standards’ generally upheld by the industry,” BD explained.

Philia did not respond to questions on the unusually long period it was given to pay for its shipments.

Further, Article 12 of the contract stipulated that the payment would be made in US dollars “or in euros using a conversion rate that is mutually agreed upon before the date of payment”. BD said this opaque clause leaves the exchange rate open to manipulation. In fact a source told BD that Philia makes “undue commission” through the manipulation of the exchange rate sometimes up to 200,000 per transaction.

Philia said it has done nothing wrong but refused to explain further arguing that doing so would amount to revealing its commercial secret to competitors. Mr. Okoli also said that competitors and ex-employees who are envious because they did not win the contract are attacking the company.

More questionable benefits

Philia also benefitted from a method of payment called open credit. Open credit which usually benefitted the buyer, does not require the buyer to provide any financial guarantee. What this means is that if Philia defaulted on the payment, since it did not provide any financial guarantee, Coraf would incur the maximum loss of the values of the shipment. And sometimes a shipment could be worth as much as $30 million.

“Open credit is [therefore] reserved for entities that have worked together for a long time”, one trader told BD.

“It is not normal that such a small company benefits from open credit. It is a model that can be justified between two private parties that trust one another, but no state owned company should ever risk public finances through such practices,” the Director of Trade Finance at a large Geneva Bank told BD.

Open credit payment method also helps Philia to avoid paying bank fees that is associated with the issuance of a letter of credit.

In other to end corruption in the opaque oil trading industry and to plug the losses incurred by resource dependent countries such as Congo, BD advocated for more transparency in the system. It also called on the Government of Switzerland, the country with the highest number of oil traders to enact laws that would force companies to maintain due diligence in their dealings.


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  • evi

    Tinubu and his brothers own oando and Tinubu owns majority of the shares

    • He is never a Do-or Die affair leader. They shout GEJ is sooooo corrupt, yet they can’t pinpoint any 5Star hotels like Oriental in Lekki, any companies like MEN, GLO Dangote group, Danjuma oil blocks, markets, ports, The Nations airlines, Media houses, Banks, Alpha-Beta construction companies…not even an Ota, sorry Otueke farms owned by GEJ.
      He has not asked anyone to kill any Youth Corps member in the South if he looses any election by soaking Baboons and Cats with bloods.

      He never swore under an oat to owning a certificate when he does not, yet GEJ has NEVER claimed a saint or he is the most upright, incorruptible, most intelligent and best all round Nigerian. He still admits mistakes daily. Unlike those whose family alone run the affairs of Lagos, you hardly here of GEJ’s family member’s names in the govt.

  • UYI111

    Why? are you scared of Tinubu call put his name in print why beating around the bush by saying oando boss thieves!!

    • 11] Nigeria grows its food now, Trains are running, our Airports are of international standard, Our roads are safer and motorable, University funding doubled and more built to admit more Jambites, our street children in the North (Almajiri) are given opportunity to learn and live in comfortable schools, hostels and eating good food, not left-overs, 13 local Motor assembling and Manufacturing companies relocate to Nigeria, 9 Local and International Power companies building their power plants since last year to improve our electricity need.
      ONE WILL ASK, WHAT CHANGE ARE THESE PEOPLE TALKING ABOUT?

      Jonathan has shown Nigerians what real democracy is. He is not killing or jailing his opponents or those that insult him in the Media and this is seen as a weakness, but he has respect for the rule of law and human life. He never sent anyone to prison for a mere allegation of corruption without proof. He allows them fair and independent hearing by those charged with this responsibility.

      These show his meek spirit and understanding that he cannot build a better Nigeria alone and that we need every hands on deck to achieve a bigger, better, prosperous and peaceful Nigeria.
      God Bless Nigeria.

      • UYI111

        If Mr President was a dictator apc will not exist in the first place.Nigerians know better apc is a fraud despiration and corruption this fake drug called apc is adultrated and kpafuka.

  • warry

    Now when it is Tinibu, they say Ondo Boss. Tomorrow Liar Mohammed the spin Doctor will spin Nigerians that it is Jonathan.

    • 8] Jonathan’s re-introduction of One-man-one-vote did not go down well with them. With Soldiers, Police, Secret Police, Civil Defense at Polling Units, Ballot box snatching and stuffing is now a thing of the past. They make you believe Jonathan has failed because Polling units are no more in people’s seating room. You forget that the President’s Party won only in 1 of the 4 governorship elections conducted when he started his tenure in 2011.
      Imo – APGA, Anambra – APGA, Edo – APC, Osun – APC, Ekiti – PDP. This will NEVER happen during OBJ government.

      9] They want Jonathan out of office because they are aware that the 2016 Census will correct the Population lies imposed on Nigerians over 60 years ago. They are MAD that Jonathan will conduct electronic census, where only Human beings will be counted and zero chances of one person counted twice. THIS IS THE CHANGE YOU ARE HEARING.

      10] They want Jonathan out of office by all means because, in 2016, Jonathan will stop the situation where a Child from Oyo state will be expected to score 129 marks to enter Federal Govt Colleges (Unity schools), while another child from Kebbi is expected to score only 2 marks to enter the same school. A young man from Osun state is expected to score 190 in Jamb to have the opportunity of a University, while his friends from Sokoto is sure of admission, even if he scores zero. It is a SHAME that young people that Jonathan is fighting for and ensuring to bring a fair Nigeria for are now brainwashed, fed with lies and and some of them are attacking the man that is fighting for them and their generations to come.
      USE YOUR HEAD AND THINK..

  • Ade

    We need more this and many more to send thieves like Tinubu, Fashola, Elrufai to jail when Buhari becomes president. No ‘sacred cow’ !

    • 5] The President handed NPA verification to a third party and eliminated port frauds. They do not benefit anymore, by dubiously seizing people’s goods and turning round to buy them in auctions. It is now 24 hours operation and surveillance giving no room for their agents to steal or frustrate importers. They want their evil reign to return. That is their CHANGE.

      6] The cabals were hurt when Jonathan blocked their monopoly of fertilizer distribution and now supply straight to real farmers at a discounted price. Farmers do not go through Ward chairmen, Party Excos, Politicians or any ‘Timber and Caliber’ to get Fertilizer.

      7] They want Jonathan out by all means, he blocked their hoarding of petroleum product and stopped Nigerians from sleeping at filling stations where many roasted alive in any event of fire outbreak. Their black market business has been destroyed by Jonathan’s proper management of the supply of these Products and because of this, they ruled that he has failed. No more pipeline fire infernos. Jonathan did not fail Honest Nigerians, but he failed the Oil Profiteers and thieves. This is why they want to bring back the fuel scarcity from the back door, they are used to punishing Nigerians.
      .

  • Yusufu

    Seems our journalist this days type anything on google and copy and paste anything that concerns nigeria

  • Northern Leaders, Oil Block Owner Have Decided That Jonathan Must Leave By All Means.
    by Chidi Cali, Oxfordshire, United Kingdom.

    It is common knowledge that some of the decisions of President Goodluck Jonathan have not gone down well with some of Northern leaders who are only comfortable when the North is ruling the rest of the country. The Oil Block owners and the Moneybags of APC are unease with him, as it is apparent that some oil block owners will lose it for good. Those that have been benefiting from the nearly a century long corruption have been cut off business as Jonathan used technology to block their sources of defrauding Nigeria. It is not business as usual and they want Nigeria to sink, as they make more profit when majority of Nigerians are suffering. One wonders why some petroleum marketers decided not sell their products to Filling stations and Nigerians because they assumed that Jonathan will lose votes when the scarcity that disappeared 3 years ago rear its ugly head again.

    • READ AND BE WISE.
      1] Majority of the Oil Blocks license in Nigeria will be expiring in few months and many of the owners are scared that President Jonathan might not renew their licence. They want him out by all means to retain the Oil blocks license. This is why 90% of the oil Block owner are sponsoring Buhari, as he has promised to protect their licence.

      2] They were hurt that President Jonathan ended their subsidy fraud. Govt reduced the payment from N1.4Trillion in 2011 to less than N400Billion in 2013 and yet their is no scarcity of Fuel in the last 3 years. They think that bringing an artificial scarcity will bring down Jonathan’s government.

      3] Jonathan sold off NEPA and ended their fraudulent NEPA contracts. Now local and International companies are building their power plants to stabilize Power. They will not use any NEPA staff to put SALT on our Power plants again to put everyone in darkness. Over 13 Foreign and local energy companies are building their plants across the country closing business for the saboteurs and their sponsors.

      4] Jonathan removed 57,000 ghost workers and 43,756 Ghost Pensioners from civil service and reduced their wealth. These rogues are using their wealth to pay newspapers, Online media blogs to be lying and sharing propaganda against the President. Some less informed or Ignorant Nigerians join them to shout CHANGE. Are they changing to re-employ the removed ghost workers or the Ghost pensioners? Be warned about the CHANGE they want you to Vote to increase their empire.

  • Everything about Obasanjo is corruption, everything about him is oppression, and everything about Obasanjo is deceit. He launched Operation Feed the Nation when he was the country’s military leader and sold the property to Obasanjo farm when he left office, he took the land of Ota people. In almost all the geo-political zones there is no place you will not find Obasanjo Farm and what his worth was when he came to power in 1999. Till now that I am speaking with you there are places in the Port that are being controlled by Obasanjo’s family. His late wife was controlling some badges and in each of the badges, they are making about N25 million per day. Tinubu and Obasanjo own Oando.

    Can you substantiate with evidence that Tinubu and Obasanjo owns Oando oil?
    It is left for you to go and investigate what I am telling you. I am not a propagandist or PDP image maker, but I am telling you what I know. Who is Wale Tinubu? He is a brother to the one that is a politician, they are very identical. We all know what happens to business in the Port, we knew what Obasanjo did, when he took the control of BPE from Atiku. We are talking of how to sanitize our country beyond Jonathan, I am not saying that Jonathan is a saint but those who want him out of power are worst than him. How many companies have you heard are owned by Jonathan in this country or abroad? Despite all criticisms, members of the opposition have not been able to point accusing fingers at Jonathan that he is corrupt as a person. I am not saying we cannot have a change because the only thing that is permanent in life is change but we need people that have a clean hand to champion change in our country. Majority of those who are shouting change in APC today were from PDP, it is only Tinubu that is not from PDP but he has most of his friends in PDP.–Gani Adams

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