By Sarah Kent
LONDON--Swiss commodities traders are buying significant volumes
of Africa's oil in opaque and lightly-regulated deals, according to
a new report that spotlights their commanding position in the
continent's energy markets.
Traders such as Glencore PLC and privately-owned Trafigura
Beheer B.V. spent $55 billion buying a quarter of the oil produced
by Africa's top 10 suppliers between 2011 and 2013, according to
the report by a trio of nongovernmental organizations, the Berne
Declaration, the Natural Resource Governance Institute and
Swissaid.
Commodities traders have, for years, moved large volumes of oil
around the world, capitalizing on price discrepancies in different
regions. However, little quantitative analysis has been done on the
scale of their trading activities, particularly in regions like
Africa where public data on oil sales is hard to obtain.
The report's findings show that these mostly private companies
have accumulated a substantial market share in Africa, competing on
a level with giant international oil companies, refineries and
state-controlled national oil companies for a share of the
continent's oil wealth. In some cases, the Swiss trading houses
dominate local export markets.
Swiss traders are the largest buyers of oil from the governments
of Cameroon, Chad, Equatorial Guinea, Gabon and Nigeria, according
to the report. Last year, Glencore was the sole buyer of crude sold
by Chad's government. The $400 million the report estimated it paid
for the oil represents 16% of the Chad government's annual
revenues.
Glencore said it is committed to full compliance with all its
statutory obligations to tax authorities and to reporting
transparently on its tax payments to governments in the countries
in which it operates.
The report didn't accuse the trading houses of any wrongdoing,
but raised concerns about the lack of transparency in African
markets. The findings play into a broader increase in international
scrutiny of the global commodities industry, which has seen the
European Union and the U.S. tighten their regulatory oversight of
the sector. Switzerland is also considering increasing its
requirement for payment transparency.
"The traders are kind of a natural fit for some of these
high-risk, volatile countries because that's the kind of
environment they're very good at working in," said Alexandra
Gillies, head of governance at the Natural Resource Governance
Institute and one of the authors of the report.
"The problem is the secrecy and lack of competition. We didn't
come across any smoking guns, but the risks are very high and, I
think, unacceptably high," she said.
Write to Sarah Kent at sarah.kent@wsj.com
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