04 March 2016

Statement on Trafigura's swap agreement in Nigeria

04 March 2016

4 March 2016 - In October 2010, Trafigura Beheer BV (TBBV), a company legally incorporated and resident in the Netherlands, entered into a Refined Products Exchange Agreement (“RPEA” or “swap agreement”) with Pipelines and Products Marketing Company (PPMC) in Nigeria.  The agreement was a standard international trading contract governed by Incoterms commercial rules. 

The swap agreement covered the supply of crude oil by PPMC to TBBV in exchange for refined products. TBBV chartered vessels for the purpose of delivering refined products to PPMC and taking delivery of the corresponding swap of crude oil at the designated ports. PPMC was responsible for all inward customs clearance and importation.  As for all international companies lifting crude from Nigeria, the crude oil exports were carried out on a FOB basis as per NNPC’s general terms and conditions. 

Trafigura has presented to the Nigerian House Committee on Petroleum Resources (Downstream) on numerous occasions in relation to this swap agreement. Each review and corresponding representation made has been found to be complete and beyond further enquiry. In the current review, a number of questions have been asked of Trafigura in relation to tax obligations. 

TBBV did not import petroleum products into the country as PPMC was responsible for all inward customs clearance and importation. Neither TBBV – nor any of its subsidiaries – has an office in Nigeria or staff (employees or third parties) locally acting on behalf of TBBV. No inventory was kept onshore and/or bonded storage. In the absence of these, both under Nigerian and international tax law TBBV has no obligation to register for tax purposes in Nigeria. As a result, the company does not have an income tax or any other tax obligation in Nigeria. We will continue to work with the Federal Inland Revenue Service in a constructive manner to this effect.