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    Wednesday, August 7, 2013

    NNPC Disputes Shell’s Claim of N109bn Loss To Crude Oil Theft, Others

    The Nigerian National Petroleum Corporation (NNPC) on Tuesday disputed claims by its partner, Shell Petroleum Development Company of Nigeria (SPDC), that their joint venture lost over $700 million (about N109.9 billion) to crude oil theft and vandalism in the second quarter of this year.‬
    ‪The dispute highlights the dearth of transparency and accountability in the operations of the country’s petroleum industry such that two partners in a joint venture find it difficult to have the same records and data of their operations.‬

    Shell and NNPC jointly own and operate several oil blocs managed by the multinational company.
    ‪The NNPC said rather than losses, the combined efforts of the government and the international oil companies (IOCs) have resulted in a significant drop in the level of pipeline vandalism and crude oil theft, with a corresponding increase in daily crude oil production.‬

    ‪The Acting Group General Manager, Group Public Affairs Division of the Corporation, Tumini Green, said Shell’s claim that it lost over $700 million by the second quarter of 2013 to crude oil theft and other disruptions in Nigeria was wrong, as such losses were not localised to the country.‬
    ‪Pointing at Shell’s Acquisition of Shale Oil and Gas Assets in North America, which she said have proven not to be good investments programmed for divestment to minimise risk, Ms. Green said that Shell’s current tight oil output of 50,000 barrels of oil per day (bopd) as against an estimated 250,000 bopd in the United States underscores the current global challenges.‬

    ‪Following the repair and re-opening of some vandalised pipelines and flow stations in recent times, she said the country’s average crude oil production, which stood at 2.13 million barrels per day (MBPD) in June, increased to about 2.4 MBPD currently.‬
    ‪“In a fortnight, repair works on the Nembe Creek Trunk Line (NCTL) which has a daily capacity of 150,000 barrels of oil per day is expected to be fully completed,” Ms. Green said. “On completion, daily average crude oil production is expected to increase to 2.50MBPD, which will exceed the national daily target of 2.48MBPD.”‬

    ‪She said government’s expectation was that the production would increase from the current 2.48 to 2.55MBPD, including crude oil and condensate, for the rest of the year, pointing out that the industry has the capacity and potential to maintain production above that level.‬
    ‪”All that is required is to continue the fight against pipeline vandalism and crude oil theft to achieve this target. This will increase the country’s 2013 average production to about 2.34Mbopd if the current fight against pipeline vandalism and crude oil theft is sustained,’’ she stated.‬
    ‪On reports about divestment by some multinational oil firms operating in the Niger Delta allegedly due to harsh operating environment, the NNPC spokesperson said the argument behind such claims was not supported by current trends among big corporations, which are in favour of a global portfolio management strategy of mergers, acquisition and divestments.‬

    ‪Pointing out that most big corporations employ the strategy to restructure and reposition their operations for better and efficient revenue growth and competition, Ms. Green wondered why anybody would be canvassing withdrawal from the region when the multinational oil companies in Nigeria were interested in the divestment of their asset as a deliberate measure to encourage and promote indigenous participation in the upstream oil and gas industry.‬
    ‪She said the strategy of divestment by the multinationals has increased indigenous participation in the industry, apart from creating new job opportunities, reducing capital flight, encouraging capacity building, and supporting gas-based industrialisation aspirations.

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