ACC probes Total oil deal with Zambia

Mar 06, 2002 01:00 AM

The Anti-Corruption Commission (ACC) has started inquiries into the irregular and highly questioned dealings between the Chiluba government and international oil company Total. And energy minister Kaunda Lembalemba has officially announced the termination of the Total International oil supply contract. Lembalemba said a favourable company was being sought to replace it.
According to ACC sources, preliminary inquiries had been launched although a full-scale investigation was yet to be commenced. The queries follow the discovery that Frederick Chiluba's government flouted regulations in awarding Indeni Refinery shares to Total International without involving the Zambia Privatisation Agency (ZPA) as required by law. The probe will also look into an earlier oil supply contract reportedly awarded to Total at State House during Chiluba's presidency. Some people close to the transaction have since been approached by ACC.

The irregular deal linked former president Frederick Chiluba to Total's highlyquestionable acquisition of Indeni Oil Refinery shares. Correspondence reveals that Chiluba had direct dealings with TotalFinaElf during their quest to purchase Indeni shares.
In a letter dated February 22, 2001 addressed to Chiluba at State House and captioned "For the attention of the President of the Republic of Zambia, H. E. Mr Frederick Chiluba ", TotalFinaElf had proposed to be the government's strategic partner in the Indeni venture. TotalFinaElf further urged government to facilitate the purchase of the Indeni shares once Agip Petroli which previously held the shares, intended to dispose of them.
And Lembalemba has announced that the appointment of Total Outremer to supply oil to the country after the reported termination of the earlier contract with Total International was merely a temporal measure. "It is simply a stop gap measure up to the time when we find another company," Lembalemba said. "We are going to take some time before we can invite tenders to enable us find good and favourable companies and we want to be very transparent."

He said the government's new partners in the Indeni Oil Refinery, Total Outremer, were so far faring well and had already managed to pay all workers at the non-operational plant. Lembalemba said Total Outremer had sourced funding and was currently working on repairs to the plant to ensure resumption of normal operations. He said he was hopeful that once an oil supply company was picked the petroleum situation would return to normal with Indeni working at normal capacity.
Recently Lembalemba had described Total's oil dealings as suicidal to the country and announced the termination of the oil supply contract with government. But further investigations have revealed that Lembalemba's announced cancellation of Total's oil supply contract was baseless as it was the same firm that was still handling the procurements.

The people handling the negotiations on behalf of Total are the same people who had handled the prior deal. Two names that have prominently featured in the negotiations were Total's local managing director Eric Chabane and his chairman Moumar Nguer. Lembalemba announced that Total's oil procurement contract had been cancelled and given to Total Outremer, which is a wing of TotalFinaElf.
"The only difference here is that Total Outremer is a wing of TotalFinaElf with the former being an overseas wing," revealed a source in the Ministry of Energy. Under the highly questionable earlier oil supply deal with Total, 668 petroleum tankers valued at over K61 bn never arrived in Zambia under unexplained circumstances. Despite police investigating the disappearance of the oil tankers, no one has been brought to book.
Lembalemba has also announced that measures were being worked out to introduce a mechanism to ensure that prices of fuel remained uniform regardless of location.

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