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Gunvor Oil Group whose bad Oil damaged Indeni still owes Government $2.8 million

Economy Gunvor Oil Group whose bad Oil damaged Indeni still owes Government $2.8...

Indeni Oil Refinery
Indeni Oil Refinery

GUNVOR Oil Group owes the Zambian Government about US$2.8 million for the damage its contaminated crude oil caused to the Indeni Oil Refinery in Ndola last year.

Indeni Oil Refinery was shut down as key installations were damaged by the faulty crude supplied by Gunvor Oil Group.
The incident forced the Government to import finished petroleum products, causing a hike in pump prices of fuel.

Energy permanent secretary Brig Gen Emelda Chola yesterday said after accepting the mistake, Gunvor paid an advance of US$625,000 for the repair of the damage caused at the oil refinery.

“They have paid an advance of $625,000 and are yet to pay about $2.8 million which Indeni has assessed at the end of their maintenance of the plant,” Gen Chola said.

Meanwhile, Gen Chola has maintained that the cancellation of the Gunvor contract was final.

Gen Chola said Government had certificates from independent inspectors

contracted and have all agreed the second cargo supplied by Gunvor on January 10, 2016 was contaminated.
Gen Chola said the test results which Gunvor claims had shown that its crude oil was not contaminated was done without the involvement of Government.

“The results he (Gunvor PRO) is claiming were done without our knowledge and involvement, therefore as far as I am concerned they are not official results,” she said.

Gunvor delivered contaminated petroleum for the second time in less than a year on January 10, 2016.

Similar consignment had caused tremendous damage to the Indeni oil refinery in 2015.

But Gunvor corporate affairs manager Seth Pietras said the crude oil that the Zambian Government had refused to off-load in Tanzania was not contaminated as the organic chloride levels found in the cargo were a common aspect of the type of product and was well within acceptable standards.

Mr. Pietras said there was no need for the cargo which had been waiting at the port in Dar-es-Salaam not to be discharged immediately.

“The cargo, consisting of gasoil and naphtha, is on-spec, and we fully stand by its quality. Testing has fully verified this,” Mr Pietras said.

He claimed that certain parties outside Government were interfering in the feedstock procurement process for their own benefit and warned that if the ‘‘scaremongering’’ was left unchecked, it would put Zambia’s crude oil supply unnecessarily at risk.

In 2015, Gunvor was summoned by the Ministry of Energy after it was found that the fuel stocks delivered were contaminated and warned that should the company supply contaminated crude feedstock again, Government would revoke the contract.

But Gunvor supplied a cargo that docked on January 10, 2016, containing high levels of organic chlorides, similar to the cargo received in June 2015 which saw Government losing over US$10 million.

Subsequently, Gen Chola announced the cancellation of the contract with Gunvor, replacing it with the Independent Petroleum Group (IPG) of Kuwait.

Gen. Chola however assured Zambians that the nation still had enough fuel stock for consumption.

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  1. That picture is not Indeni Petroleum Refinery? LT, how can you photo shop for a Refinery photo online and claim it’s Indeni?

    Otherwise my comment is government should allow Indeni to procure Crude Oil so that they can manage their own affairs. This way Indeni will be accountable for the crude coming into their Refinery. This problem will not end as long as the Ministry of Energy does the procurement.

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