Report warned of Triton’s suspect deals

By Joseph Murimi

The Sh7.6 billion Triton Petroleum Oil scandal took a new twist amid revelations that a report, which warned over the firm’s suspect deals, was ignored.

On Wednesday, it also emerged Energy PS Patrick Nyoike and sacked Kenya Pipeline Company MD George Okungu received weekly briefings on the status of oil stocks.

This is despite the fact that Nyoike and Okungu pleaded ignorance on the developments. Documents seen by The Standard reveal Mr Nyoike received briefings, with the latest one on December 9, two weeks before the scandal became apparent.

Nyoike said on Tuesday that he does not micro-manage KPC and offered to resign to pave the way for investigation should evidence against him be provided.

"If I am implicated, I will step down and I am prepared to face the law," said Nyoike. I can assure you I have never dealt with Triton and I don’t manage KPC."

He said Triton was a small player in the oil industry, controlling only four per cent of the market.

But the most intriguing is the report by Deloitte Consulting Limited in 2006, which detailed how Triton was allowed to hold nearly half of all the oil products at the Kipevu Oil Storage Facility. Triton’s opening stocks would be higher, meaning its evacuation costs would be lower, notes the report, a copy of which was given to Nyoike and Okungu each.

Large Volumes

As of January 31, 2006 Triton was holding the largest amount of stocks at Kipevu, with 87 million litres accounting for 49.2 per cent of the entire stock.

The audit noted that for several months, Triton had held more reserves than its entitlement and had flouted tender rules that required that stocks be moved within a month.

The report said Triton was allowed to keep the high volumes even though the numbers of shippers had increased and that storage space was limited. Deloitte recommended that KPC enforces the rules of the tenders and force Triton to evacuate its stocks.

The report, presented to Okungu and a copy sent to Nyoike in 2006, had recommended that Triton evacuates stocks immediately to create space.

"The non-movement of Triton material limits ullage to other shippers and exacerbates the situation where only 210 million litres of 280 can be moved in any given month,’’ says the report.

The report said the non-movement of the Triton stock doubled the amount of dead stock, which stood at 70 million litres at the time.

Players in the industry say failure by Triton to move such large amounts of stocks created an artificial shortage even as ships waited in the high seas to offload the products.

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