Two days before Triton Petroleum Limited was placed under receivership, revealing to the whole world how Kenyan taxpayers had lost more than Sh9 billion in dubious oil deals, Benedict Mutua, the chief scheduler at Kenya Pipeline Company (KPC), wrote a memo to the operations manager.
Mr Mutua, a veteran in petroleum operations with 13 years’ management experience, was the link between oil marketing companies (OMCs) and KPC. He was to verify documentation for petroleum products, which had been paid for but were being stored at the 326-million-litre Kipevu Oil Storage Facility (KOSF) before their release.
However, since the signing of the collateral financing agreement (CFA) between KPC and OMCs in July 2005, Mr Mutua got an additional role: Verifying documentation between the banks that had agreed to finance OMCs, who had won contracts to purchase petroleum products through the Open Tender System (OTS).
The Kibaki administration created the OTS to enable local oil marketers to compete with multinational companies on the international market for petroleum products. The local firms, however, found themselves lacking the financial might to compete with multinationals during tendering, leading to the creation of CFAs in 2004.
Four years had since passed and KPC, which was supposed to hold the petroleum products bought through the CFAs, had failed spectacularly. Some 126 million litres of petroleum products bought by Triton, according to an audit at the time, had gone missing and banks were on the neck of KPC, demanding that taxpayers pay for the losses they had incurred.
In particular, KCB and the Eastern and Southern African Trade and Development Bank had gone to court, seeking to place Triton under receivership. In the midst of the crisis, eight days before Christmas in 2008, Mr Mutua wrote a memo to Peter Mecha, the KPC operations manager.
From the tone of the letter, whose contents are exclusively being shared by the Nation 13 years later, Mr Mutua knew he had let down KPC, taxpayers, banks and the entire nation. Everyone was owed an explanation.
"I am at pains to explain this matter because nobody believes me, but in my mind, I trusted Triton were telling the truth," he explained to Mr Mecha. "It is unfortunate that this continued for a long time without your knowledge. I thought I could handle this until it dawned on me that I had been cheated," he continued.
"At no time in my 13 years in the scheduling office have I ever […]
