MRS Holdings Limited, the oil marketing firm owned by Sayyu Dantata, the younger brother of Aliko Dangote, helped provide the cash used by state-owned oil and gas company NNPC Limited for buying two shallow-water oil assets from Chevron Corp, Bloomberg reported Wednesday.
MRS Holdings reported losses for three consecutive years to 2020, managing to post a meagre profit last year.
Bahamas-registered Bestaf Funding Limited, a subsidiary of MRS Holdings, funded the purchase valued at $300 million, according to NNPC’s latest financials and a response to Bloomberg’s query by Umar Ajiya, NNPC’s chief financial officer.
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NNPC’s audited earnings report for 2021 was released in October, but it is no longer on its website.
An official of the NNPC told PREMIUM TIMES the firm no longer publishes its financials.
NNPC will pay Bestaf back over four and a half years by supplying Dantata’s MRS 8,000 barrels of oil per day throughout the contract duration, according to the financial report quoted by Bloomberg.
It equals 9.4 million barrels over the period, not including Saturdays and Sundays, translating to $737.7 million (using Brent crude’s price of $78.5 per barrel), 146 per cent higher than the original sum of acquiring the assets.
Bestaf Funding does not have a website even though it is said to be registered in Bahamas, a country notorious for providing shelter for several shell companies linked to oil & gas firms involved in shifting profits to overseas havens through grand tax avoidance schemes.
Earlier this year, Bestaf Funding secured $300 million (the same amount in question) in the form pre-export finance facility from PAC Capital Limited, the investment banking unit of Pan-African Capital Holdings to support the purchase of some strategic oil & gas assets with the target of the planned acquisition not disclosed at the time.
A History of Suspicious Tax Schemes
Dantata and MRS have a history of dealings with tax havens and the former’s long relationship with Chevron through tax avoidance transactions dates back to at least 2018, when a PREMIUM TIMES-backed investigation christened West Africa Leaks bought to light a $1 billion surreptitious oil deal between MRS and Chevron, pointing to a tax avoidance plot.
The investigation revealed MRS Holdings and Ivorian-based Petroci Holdings acquired Chevron Nigeria Holdings Limited.
“Chevron Nigeria Holding Limited, a Bermudian registered company, in turn owns 60 per cent of Chevron Oil Nigeria,” the report said.
“The end result of the transaction was a Nigerian entity acquiring another Nigerian company via two shell companies in-between.
“Tax experts still working on this transaction who cannot be identified for this reporting now, say the only business reason for this otherwise complicated corporate structure is a tax exploit,” the report went further to say.
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MRS Holdings and Petro Holdings purchased the whole of Chevron’s downstream assets at the time using a consortium named Corlay Global SA, registered in Panama, another tax haven. Corlay Global SA is itself owned by these two.
The acquisition conducted via a forward sale agreement is secured against crude from oil-producing fields within NNPC’s portfolio.
NNPC’s chief Mele Kyari said his company had entered into a “locked pact” with Dangote Refinery, Dangote’s 650,000-barrel-per-day oil refining plant based in Lagos, to supply crude to the refinery for the next 20 years, backed by a right-of-first refusal agreement.