NAPIMS Group General Manager, Dafe Fejebor, made a revelation before the House of Representatives committees on Petroleum (Upstream) and Public Procurement which began an investigation into the alleged $260 million “illegal” contract by NAPIMS, saying the International Oil Companies (IOCs) in the joint Venture’s production are being owed $7 billion by the Nigerian National Petroleum Corporation.
The contract in contention was for four single source contracts for projects in Exxonmobil’s Usan Deepwater Project, at a total value of $260 million without any form of the tendering process.
According to Fejebor, “In the last five years, things really started going bad and we are really trying our very best to get them resolved. The Minister has stepped in to see how he can mitigate our exposure. In short, we are at a crossroad 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 cutting costs of services to survive, but some guys providing us services totally refused. 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 percent 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. 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,” he revealed.
The joint committees headed by Hon. Victor Nwokolo while considering a memorandum brought before it by Tilone Subsea, directed that ExxonMobil, represented by its General Manager, Rotimi Olubeko, to rescind all decisions related to the four single source contracts for projects in Exxon mobil’s Usan Deepwater Project, that was taken after March, this year when the advert for the public hearing was placed.
Rotimi said he was not aware of the $260 million, adding that there were different contracts awarded by ExxonMobil and none was of that amount.
“The operations in USAN field, the subject of this hearing, is a joint venture between NNPC and Chevron. The NAPIMS is a Directorate of the NNPC charged with the responsibility of managing Nigerian government’s investment in the upstream sector of the oil and gas industry.
“It is set up to maximize return on government’s investments through effective supervision of the JV, PSC (production sharing contract) and SC (service contract) companies, using best industry practices. Since NNPC is wholly owned by the Federal Government, the National Assembly has unquestionable legal impetus to act on this matter,” says Rotimi
