The recent report regarding the incredible legal claim figures in the Oryx/Oilcom arbitration case has raised significant questions. According to an article in The Citizen, the final award issued by the arbitral tribunal on November 30, 2023—signed by Hon. Dr. Engera Kileo, Hon. Sophia Wambura, and Prof. Mussa Assad—amounts to a staggering Sh468 billion. This amount primarily stems from Oryx’s “failure to provide a minimum of 40% of indicative volume of imported oil products for transit transportation,” representing 85% of the total claim.
The core issue revolves around Oryx's obligation to use Oilcom’s trucks to transport oil products to inland countries from Tanzania. A source from Oryx clarified that this obligation pertained to 40% of actual transit volume for a specified list of customers. However, the tribunal’s award calculated compensation based on the entire indicative transit volume, resulting in a claim of USD 147,200,221 over 75 months of activity. This implies a remarkable monthly profit of nearly USD 2,000,000 for Oilcom’s trucking operations—figures more lucrative than some infamous operations in history.
Several discrepancies challenge the credibility of these numbers:
Financial Records vs. Claim Profits: Oilcom’s reported profits to the Tanzania Revenue Authority (TRA) are minimal or nonexistent. If Oilcom’s claim reflects reality, the company should have consistently reported an annual profit of USD 24,000,000. The disparity between these numbers suggests potential undeclared revenue, which warrants further scrutiny by the TRA.
Continued Operations: The claim implies losses due to Oryx’s failure, yet market sources confirm that Oilcom’s trucks continued operations throughout the period. If true, Oilcom’s financial records should reflect substantial transportation margins.
Calculation Methodology: The claim’s basis—using turnover figures rather than profit margins—appears flawed. Typically, a legitimate claim for losses should reflect lost profit margins, not gross turnover. Oilcom’s use of turnover inflates the claim and creates confusion between figures quoted in Tanzanian shillings and U.S. dollars.
Operational Costs Ignored: Turnover figures should be adjusted for operating costs, including fuel, maintenance, salaries, and other operational expenses. Ignoring these factors exaggerates the net profit implied by the claim.
Ownership of Fleet: Notably, Oilcom owns zero trucks; its fleet operations largely fall under Al-Hushoom Investment (T) Ltd, which is not within the contract’s scope. This raises questions about the legitimacy of including such volumes in the claim.
These points highlight the need for a thorough investigation into the claim’s basis and figures. A closer review by the TRA and relevant authorities could clarify inconsistencies and ensure transparency. Further analysis on other aspects of the case is underway, and we will continue to keep readers informed.
Stay tuned for more insights into this developing story.
The core issue revolves around Oryx's obligation to use Oilcom’s trucks to transport oil products to inland countries from Tanzania. A source from Oryx clarified that this obligation pertained to 40% of actual transit volume for a specified list of customers. However, the tribunal’s award calculated compensation based on the entire indicative transit volume, resulting in a claim of USD 147,200,221 over 75 months of activity. This implies a remarkable monthly profit of nearly USD 2,000,000 for Oilcom’s trucking operations—figures more lucrative than some infamous operations in history.
Several discrepancies challenge the credibility of these numbers:
Financial Records vs. Claim Profits: Oilcom’s reported profits to the Tanzania Revenue Authority (TRA) are minimal or nonexistent. If Oilcom’s claim reflects reality, the company should have consistently reported an annual profit of USD 24,000,000. The disparity between these numbers suggests potential undeclared revenue, which warrants further scrutiny by the TRA.
Continued Operations: The claim implies losses due to Oryx’s failure, yet market sources confirm that Oilcom’s trucks continued operations throughout the period. If true, Oilcom’s financial records should reflect substantial transportation margins.
Calculation Methodology: The claim’s basis—using turnover figures rather than profit margins—appears flawed. Typically, a legitimate claim for losses should reflect lost profit margins, not gross turnover. Oilcom’s use of turnover inflates the claim and creates confusion between figures quoted in Tanzanian shillings and U.S. dollars.
Operational Costs Ignored: Turnover figures should be adjusted for operating costs, including fuel, maintenance, salaries, and other operational expenses. Ignoring these factors exaggerates the net profit implied by the claim.
Ownership of Fleet: Notably, Oilcom owns zero trucks; its fleet operations largely fall under Al-Hushoom Investment (T) Ltd, which is not within the contract’s scope. This raises questions about the legitimacy of including such volumes in the claim.
These points highlight the need for a thorough investigation into the claim’s basis and figures. A closer review by the TRA and relevant authorities could clarify inconsistencies and ensure transparency. Further analysis on other aspects of the case is underway, and we will continue to keep readers informed.
Stay tuned for more insights into this developing story.
