Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke
• IOC/NNPC in battle of wits over projects
By Alike Ejiofor
Determined to have a first hand understanding of the cause of the
prolonged fuel scarcity across the country, the Minister of Petroleum
Resources, Mrs. Diezani Alison-Madueke, paid a surprise visit to several
filling stations in Lagos Sunday and concluded that the marketers were
behind the scarcity of the product.
Speaking during the inspection of some filling stations in Lagos State,
the minister said the country had enough PMS to meet the domestic
demand.
“We have enough fuel to wet the country, but the challenge we are
having is that, after loading, some truck drivers will not supply the
lifted products at the designated filling stations. Having gone round
the state (Lagos), it is not just the filling stations at Ikoyi that
appeared to be wet with product, but other extreme locations like Ajah
and other parts in Surulere,” she said.
This came on a day that the Nigerian National Petroleum Corporation
(NNPC) and the International Oil Companies (IOCs) are engaged in rounds
of accusation and counter accusation over the commencement of new
projects by the IOCs.
Speaking on the scarcity of petrol, Alison-Madueke said there were many
factors militating against efficient delivery of the products to the
end users.
“We learnt that some of the marketers instructed their drivers to
change the number plates of their trucks to make it difficult for
tracking. Does it mean those markets they are diverting the product to
are more lucrative than intended market? I have directed the heads of
the agencies, Departemnt of Petroleum Resources (DPR), Pipeline Product
Marketing Company (PPMC) and Petroleum Products Pricing Regulatory
Agency (PPPRA), to get back to me today and give me a clear picture and
timeline in terms of numbers of trucks coming in to Lagos, the volumes
and where they are getting to in terms of the market,” she said.
“If we can establish there is (diversion of products), I want to know
when and how this is being done. They need to supply me how these trucks
are being tracked because diversion is not easy to do. They will be
sanctioned and I am ready to publish names of anybody that may be
involved,” she added.
The minister however assured Nigerians that there were enough products
in strategic reserves that would last for over two weeks if importation
of fuel were to be suspended.
The private marketers had blamed the scarcity on the delay of their fourth quarter 2014 import allocation by the PPPRA.
The private marketers had blamed the scarcity on the delay of their fourth quarter 2014 import allocation by the PPPRA.
Meanwhile, the NNPC and some of the IOCs seem headed for a collision
over the alleged failure of the NNPC Board to sit for the past 15 months
to approve new oil and gas projects, coupled with the long contracting
cycle of projects, THISDAY has learnt.
This impending clash between the two bodies, it was learnt, had
prompted some of the major IOCs to place embargo on new employment as
they insisted that no jobs would be created without new projects coming
on stream.
Some of the projects that have suffered undue delay due to budget
issues include Bonga South West, Bonga North (Aparo) and Bonga North
West, initiated by Shell Nigeria Exploration and Production Company
(SNEPCo), under a Production Sharing Contract (PSC) arrangement with the
NNPC.
Other projects include Eni’s Zabazaba and Etan Fields, under the
company’s Agbara and Abo projects; Chevron’s 100,000 barrels per day
Nsiko deepwater project; and Exxonmobil’s Bosi and Uge projects.
Officials of some IOCs told THISDAY that there were other new projects
that successfully passed through the National Petroleum Investment and
Management Services (NAPIMS), an investment arm of the NNPC, but had not
been approved by the NNPC board.
THISDAY gathered that the frosty relationship between the NNPC and the
IOCs over new projects had deteriorated to the extent that a top
official of the corporation last week walked out on the deputy managing
director of one of the major IOCs, who led a team of officials of his
company to the NNPC to discuss the IOC’s budget from his office over
disagreement on budget.
But the NNPC officials, who spoke to THISDAY on condition of anonymity,
defended his action, saying the affected deputy managing director and
his team presented a budget that was more expensive than the price of
crude oil.
“They presented a budget based on $118 per barrel, when the price of
crude oil is between $105 and $110 at the international market. How can
the cost of producing crude oil be higher than the price of oil at the
international market and you expect me to discuss with them. I did not
have any issue to discuss with them,” he said.
However, some officials of the IOCs also told THISDAY that all the new projects they initiated had been put on hold because the NNPC board that ought to approve the projects had not sat since January 2013.
However, some officials of the IOCs also told THISDAY that all the new projects they initiated had been put on hold because the NNPC board that ought to approve the projects had not sat since January 2013.
“The NNPC board has not sat for the past 15 months to approve new
projects. So, all contracts have been put on hold. We have plans; we
have aspirations, but if you have a roadmap and there is a stumbling
block, what can you do? Nobody can bring money now and it is killing
investments. Initially, they blamed the Petroleum Industry Bill (PIB)
but nobody is talking about PIB these days, yet they cannot approve new
projects,” said an official of one of the IOCs.
Another official of one of the IOCs told THISDAY that the Oil
Producers’ Trade Section (OPTS) of the Lagos Chamber of Commerce and
Industries (LCCI), which comprises all the IOCs and the Nigerian
independent producers, had sent representation to the highest levels of
government on the precarious situation but no positive response was
received.
“OPTS has gone to the highest level of government but the government
seems not to be listening. There is embargo on employment because if you
cannot invest, you cannot employ people. If the projects we have are
allowed to go on, it will boost our daily production and create
employment opportunities. All new projects go through NAPIMS but once
they get to the NNPC for board approval, they get stalled,” he said.
But a member of the NNPC board and Group Executive Director (GED) in
charge of Exploration and Production (E &P), Mr. Abiye Membere, told
THISDAY at the weekend that the board had approved enough projects for
the IOCs.
“NNPC has never complained over the board meeting of the IOCs. But if
they are complaining about the NNPC board, all I can say is that we
cannot keep on approving projects, when they have not done anything on
the ones we have approved. The EGTL (Escravos Gas-To-Liquid) project has
been on for 10 years and they want us to approve new ones. We cannot
keep on approving. We have approved the ones that can keep them going,”
he said.
On the claim made by some IOCs that they had placed embargo on
employment because there were no new projects, Membere said: “You don’t
employ people because you have new projects; you employ people because
some people are retiring and you want to replace the aging workforce.”
NNPC’s Group General Manager (GGM) in charge of NAPIMS, Mr. Fidel
Pepple, told THISDAY that the “IOCs always have excuse for everything.”
According to him, “Budget has not been passed. So, how can they start new projects? Has the bidding process been concluded? Even when you ask them to issue commercial invitation to tender, they will not do it until two years after the conclusion of the technical tender and they will turn around to blame the NNPC for the delay.”
According to him, “Budget has not been passed. So, how can they start new projects? Has the bidding process been concluded? Even when you ask them to issue commercial invitation to tender, they will not do it until two years after the conclusion of the technical tender and they will turn around to blame the NNPC for the delay.”
Spokesman of the NNPC, Dr. Omar Farouk Ibrahim, however, told THISDAY
that it was not true that the NNPC board had not met for 15 months.
“Whoever told you that the board never sat last year except in January did not tell you the truth,” he said.
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