The National Contracts Commission (NCC) has given the Petroleum Corporation of Jamaica (PCJ) the go-ahead to award Glencore Energy UK Limited the contract to trade Nigerian crude oil on behalf of Jamaica on the international market.

Under the contract, approved on July 25, Glencore will pay the Jamaican Government 25 US cents for every barrel sold, twice what the country was being paid by Trafigura Beheer BV, the Dutch firm that held the contract since 1999.

The contract, which was automatically renewed annually without competitive tender, came under scrutiny after Opposition Leader Bruce Golding late last year exposed the transfer of $31 million from the Dutch company to a Jamaican bank account linked to the ruling People’s National Party (PNP).

The PNP said the money was a donation for electioneering, but Trafigura later claimed that it was payment on a commercial agreement.

The issue proved a major embarrassment for the Government and resulted in the resignation of then information and development minister Colin Campbell, who also quit as the PNP’s general-secretary.

But Campbell’s resignation was not enough to stem the tide of criticisms levelled at the Government for what was widely regarded as a conflict of interest and an example of the need for legislation to govern political party financing.

In late February, after soaking up months of damaging criticism, current information minister and PNP general-secretary Donald Buchanan told journalists at a Cabinet news briefing that the money had been returned to Trafigura.

Buchanan had said that the money was sent to the Dutch firm via an emissary. However, Trafigura, in an e-mail response to an Observer query, said the money was “sent by wire in the appropriate manner via the international banking system”.

Under the terms of the contract with Trafigura, the firm was required to post the necessary US$1-million security bond to the Nigerian National Petroleum Corporation to lift and market Jamaica’s allocation of 30,000 barrels of oil per day and to pay the PCJ 12.5 US cents per barrel of oil lifted.

Between 2000 and 2006, Jamaica earned approximately US$2.4 million from lifting 32.3 million barrels of crude.