The Management of the Nigerian National Petroleum Corporation NNPC has proffered informed perspective on the reported award of oil infrastructure surveillance contract to an indigenous firm, Ocean Marine Solutions for the protection of the strategic 87-kilometre Trans Forcados Pipeline (TFP).
In a statement, the Group General Manager, Group Public Affairs Division of the Corporation, Ndu Ughamadu, explained that the decision to assign the TFP surveillance package to Ocean Marine Solutions was reached after consideration of huge losses on TFP and rigorous appraisal of the company’s impressive record of performance on the Bonny-Port Harcourt and Warri-Escravos crude evacuation lines.
He explained that the new contract which requires the contractor to pay for any damage to any inch of pipeline under its watch, offers immeasurable benefits to the NNPC, its Joint Venture partners, the host communities and the entire Federation.
Mr. Ughamadu noted that the NNPC, faced massive losses in projected revenue, stakeholders in the TFP which today account for daily production of over 250, 000 barrels of crude oil were unanimous in the decision to seek better ways of ensuring reliability and availability of the line.
In 2018, we lost over 60 days of production due to incessant breaches on the TFP despite having a security contract in place. In terms of production numbers, this translates to over 11 million barrels of crude oil which on face value equates to over $800m in lost revenue to all the stakeholders in the matrix which includes: NNPC, its Joint Venture partners and the Nigerian Federation,” Mr Ughamadu stated.
According to him, the surveillance company was obligated to protect the lines and bear the cost of repairs if and when there is any breach to the pipeline adding this arrangement was totally different from the old order where the contractor gets paid for surveillance duties and totally exempted from repair cost or any form of responsibility in the event of any line break or breach to the pipeline he is paid to watch.
On the allegation of non-adherence to due process in the offer of the surveillance deal, NNPC explained that all Federal Government-approved procurement processes and procedures in the award of highly sensitive national security contract were followed to the letter.
The NNPC and its stakeholders will continue to do everything legally possible to recover our pipelines, cut our losses, reduce downtime, improve crude production and by extension increase inflow of revenue to all the tiers of the Federation in line with our mandate, the Corporation said.
In another development, the Nigerian National Petroleum Corporation NNPC and the Nigerian Content Development and Monitoring Board NCDMB has reiterated their committment to grow Local Content in the Oil and Gas Industry from the current 40 per cent to 70 per cent by 2027 as part of strategies to sustain economic development in country.
The Group Managing Director of NNPC Dr. Maikanti Baru who stated this at the 8th Practical Nigerian Content Conference held in Yenogoa, Bayelsa State, Southern Nigeria also noted that strategies for implementing the NCDMB Local Content development includes closing human capacity gaps, skills acquisition and assets ownership by indigenous companies, amongst others.
He explained that the theme of this year’s Conference: Driving Economic Development and Sustainability is very relevant to NNPC, the Industry and the country at large given the considerable gains recorded in the nation’s Oil and Gas landscape.
The GMD said that as early as 2005, despite almost 50 years of a vibrant national oil industry experience, NNPC was concerned at the low level of Nigerian Content in the country and thus called for a fresh approach to domesticating Oil and Gas Industry spend through the establishment of the Nigeria Content Division (NCD) with the aim of identifying and guiding the implementation of key national content initiatives, including promoting local manufacturing of steel plates & pipes and developing engineering design expertise in the country.
Dr. Baru maintained that by 2010, when the Nigerian Oil and Gas Industry Content Development (NOGICD) Act was enacted, a National Content Coordination Framework, which incorporates the key stakeholders in achieving increased linkage of the petroleum sectors with other sectors of the economy, was established under NNPC’s Nigeria Content Division, stressing that the Division then metamorphosed into today’s NCDMB.
He stated that in a bid to stimulate the participation of indigenous companies in the Oil and Gas Industry, NNPC has continuously worked with NCDMB to align the Nigerian Petroleum Exchange (NipeX) portal and the Nigerian Oil and Gas Industry Content Joint Qualification System (NOGICJQS) portal with a view to adequately capture the capacity of local companies to enable them take advantage of the available opportunities.
He revealed that local companies were now active participants in the bidding process for the crude oil term contracts and the Direct Sale of Crude Oil and Direct Purchase of Petroleum Products (DSDP) contracts.
He said the NNPC was proud of the Nigeria Content achievements in the nation’s sustainable economic development, saying that the achievements have stimulated other sectors like Information & Communication, Automobile, Construction and Power.
The Executive Secretary of NCDMB, Simbi Wabote, applauded the NNPC for driving sustainable economic development through the Board even as he assured of the benefits of the initiative to the country going forward.
Source: Voice of Nigeria