A ROW has erupted over government’s cancellation of the Gunvor oil supply contract, with the company demanding evidence to prove that the latest consignment was contaminated.
Gunvor has accused outside competitors of engaging in ‘‘scaremongering’’ which it warned puts Zambia’s oil procurement system at risk.
Gunvor’s response follows the cancellation of a supply contract which has left a ship with contaminated feedstock on the high seas.
The company has been accused of delivering contaminated petroleum for the second time in less than a year. The consignment has caused tremendous damage to the Indeni oil refinery.
But Gunvor Oil Group yesterday strongly denied claims that it delivered contaminated feedstock.
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 product supply unnecessarily at risk.
And Mr Pietras has expressed ignorance over the contract cancellation by the Zambian government and maintained that organic chloride levels found in the cargo were a common aspect of the type of product and was well within acceptable standards which did not pose a risk to the refinery.
“We are obviously sensitive to any potential for adverse effects. But this is all being done in the public eye, and we stand by the products being supplied,” he said.
He said Gunvor had proposed numerous alternatives in good faith to ensure Zambia’s products supply was ensured as it was a long-term partner and had always done well from the time it started delivering fuel to Zambia.
“As for any issues, I assume certain parties outside government…I don’t know who… are scaremongering for their own benefit. This is putting Zambia’s products supply at risk unnecessarily,” he said.
In 2015, Gunvor was summoned by the Ministry of Energy and complained that the fuel stocks delivered were contaminated and warned that should the company supply contaminated crude feedstock again, Government would revoke the contract.
Last week, the Ministry of Energy revealed that 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, Government announced the cancellation of the contract with Gunvor, replacing it with the Independent Petroleum Group (IPG) of Kuwait.
Energy permanent secretary Emeldah Chola said Gunvor supplied contaminated crude oil to Zambia containing high levels of organic chlorides but the consignment was intercepted before the ship could offload the crude.
Gen. Chola has however assured Zambians that the nation still had enough fuel stock for consumption.