Controversy looms over Nile Petroleum, Glencore joint venture
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July 20, 2011 (JUBA) - An MP from South Sudan’s parliament has
requested that further inquiries are made as to the suitability of
Glencore International - a Switzerland-based firm - to enter into a
joint venture with South Sudan’s Nile Petroleum Corporation (Nilepet).
Marc Rich (AP)Marc Rich, founder of the company was - until a
presidential pardon in 2001 - was wanted in the US by the Federal
Bureau of Investigation’s (FBI) for massive tax fraud.
The merger, according to Mangok Kali Mangok, Nilepet’s managing
director was meant to ensure that crude oil entitlements from the
company and the Republic of South Sudan in general, find international
markets.
However, a South Sudan MP has said that the national oils company
risks being duped by entities like Glencore, with “unclear and lacking
proper records.”
“We need to institute proper inquiries into such joint ventures like
the one between Glencore and Nile Petroleum Corporation. As South
Sudanese, we risk loosing to investors, if we do not trade
professionally,” the legislator, who preferred anonymity, told Sudan
Tribune on Wednesday.
Glencore’s founder, was in 1983 indicted for evading more than $48
million in taxes, and charged with 51 counts of tax fraud, as well as
running illegal oil deals with Iran during the US’s 1979-1980 hostage
crisis. He was pardoned controversially on Bill Clinton’s last day in
office at White House.
“Some questions have still been left answered. This leaves South
Sudanese wondering as to why Nile Petroleum opted to enter into a
joint venture with this company [Glencore International] before
tracing their background,” said the South Sudan-ruling party
legislator.
Speaking from Sudan’s capital, Khartoum, Nilepet’s managing director
downplayed these fears, saying his company has already done researched
the company before entering the partnership.
“I cannot comment on such allegations of criminality involving
Glencore International. As Nile Petroleum, we viewed the profile of
this company and we were impressed. That is how we formed a joint
venture,” Mangok told Sudan Tribune.
Under the deal, he added, Glencore will assist in marketing South
Sudan’s crude oil, ensuring that it conforms to international
standards, in addition to offering other capacity building
initiatives.
But David Loro Gubek, the Energy and Mining ministry’s undersecretary
said Glencore and Nilepet were simply partners in business and that
the joint venture was just a “local partnership” that excluded a
Memorandum of Understanding (MoU) between the two.
“Some media mistook this joint venture to be an agreement that, which
was a misrepresentation. For any agreement such as a memorandum of
understanding to be reached between two entities, it has to be at a
ministerial level, not between companies,” Gubek told Sudan Tribune in
a separate interview.
He denied reports that Glencore would be the sole company involved in
marketing the new country’s crude oil, arguing that the process cannot
involve only a single entity.
The joint partnership between the two, he added, was simply the
outcome of cooperation among the top leaderships in these companies,
citing the recent fuel crisis that hit South Sudan, where the Nilepet
and Glencore jointly supplied fuel from Kenya to be used during the
July 9 independence celebrations.
In March, South Sudan’s Energy and Mining ministry and Petroliam
Nasional Berhad (PETRONAS), a Malaysian-owned oil and gas company
signed a two-year memorandum of understanding (MoU) aimed at boosting
mutual cooperation between the two parties.
The MoU, signed in Juba, South Sudan’s capital, outlined the overall
principles of cooperation in the oil and gas sector between the
government and the Malaysian oil giants, creating an avenue for
exploiting existing business opportunities.
(ST)
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