Monday 17 December 2012

NNPC cautions IOCs against false accusation

ABUJA—THE Nigerian National Petroleum Corporation, NNPC, has cautioned International Oil and Gas Companies, IOCs, operating in the country against misinforming the public that it was deliberately stalling the execution of some multibillion dollar projects in the sector.
Noting that this was a deliberate attempt to stampede it into hasty decisions, NNPC maintained that it will continue to uphold due process in contract awards.
A statement from the Corporation’s spokesmen, Mr. Fidel Pepple, noted that while concerns were expected in the process leading to the award of major oil and gas projects, laid down procedures must be followed.
“NNPC has an established procedure for contract and project approvals, which include the conduct of economic analysis to establish project viability and Federal Government’s take from investments in the upstream,” he said.
Against this backdrop, Pepple said the NNPC will not be stampeded into taking decisions that may be inimical to the nation because of the IOCs pecuniary interests.
The NNPC also defended accusations that it refused to hold its periodic Group Executive Committee, GEC, meetings to discuss some major projects such as the TOTAL Egina deep offshore project, and its presentation for Board approval.
It said, “This claim is untrue as GEC meetings are being held weekly or fortnightly. However, Erha North Phase 2 and the Egina project contracts have not been discussed yet at these meetings  because  NNPC management is critically reviewing the overall economics of the project in view of their high cost estimates in order to establish their validity, maximise Federal Government’s stake, and ensure comparative price competitiveness vis-à-vis benchmarks.”
With regard to allegations of contract kick-backs from the Egina project in favour of its Group Executive Director, Exploration and Production, Mr. Abiye Membere, as well as his deliberate scuttling of the Bonga Southwest project, the Corporation insisted that such allegations were totally misplaced and untrue.
The NNPC explained that Bonga Southwest was never in the cards as there was never a time that SNEPCO proposed three Floating Production Storage Production offloading facility (FPSOs) for Bonga Field Development.
“Engr. Membere also did not scuttle Bonga Southwest/Aparo Project six years ago. He was the GM, PSC Division of NAPIMS in 2006, and helped to move forward the strategy for a leased FPSO project for Bonga Southwest/Aparo project. He was deployed from this position to another position in NNPC’s Engineering& Technical Directorate in 2007, during a routine management reorganisation exercise,” it added.
The Corporation further explained that the Bonga South/Aparo was recycled for concept re-evaluation in 2009, because of low number of bids for the project at both the technical and commercial stages nof the tender. “The decision to recycle Bonga was taken by NAPIMS top management and not Engr. Membere.”
On the issue of funding, the NNPC insisted that there were no funding constraints for the Production Sharing Contracts, PSCs, considering that the operators funded the projects 100 percent.
In spite of the recent attacks, the NNPC maintained that it remained focussed on its core mandate of ensuring that the Federal Government and the Nigerian people derived maximum benefits from the proceeds of the nation’s hydrocarbon resources.

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