Petroleum Investment Management Services, NAPIMS, which is the Upstream investment arm of the Nigerian National Petroleum Corporation, NNPC, has said International Oil Companies, IOCs, in the Joint Ventures production are being owed $7 billion by the state-run oil firm.
NAPIMS Group General Manager, Dafe Fejebor, disclosed this before the House of Representatives committees on Petroleum and Public Procurement which began investigation into the alleged $260 million “illegal” contract by NAPIMS.The Nation had exclusively reported that the huge debts were owed over a period of five years.
He said: “In the last five years, things really started going bad and we are really trying our very best to get them resolved.
“We’ve gone to arbitration and they are trying to find aways of resolving them offline. The Minister has stepped in to see how he can mitigate our exposure.
“In short we are at crossroads because when we approached the IOCs, they simply told us that we have to operate a base case budget before they can continue with us.
“And from my understanding of business, a case base budget is doing business without growth and we have to resort to cut cost on services to survive, but some guys providing us services totally refused.”
This, he said, has necessitated the organisation’s move to cut costs.”We wrote to them to go renegotiate all services, whether ongoing or the one that they’re out to put in place, they should knock them down by 30 to 40 per cent cost reduction.
“They went to town with some, they were successful as some gave up to fifty percent of their services,” he said, lamenting that the rig providers especially the drill ships refused to budge.
The NAPIMS chief said the move was necessary as “our cost outlay per day was $600, 000 spread, bringing our production cost per barrel to about $57 to $60 per barrel. There was no way we could continue with that.“
