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Deep water oil projects: Nigeria suffers 40% capital flight

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02/12/2019 | 03:51am EDT

Nigeria, Africas biggest crude exporter, has suffered an average of 40 per cent capital flight in deepwater oil projects execution, New Telegraph has learnt.

Shell and other operators of deepwater in the country, which unanimously lamented the huge hike in operating cost, attributed this to dearth of alliance among providers of marine vessel and logistics services for the industry.

This trend, checks by our correspondent revealed, is pushing more investments away from Nigeria to Angola and also to emerging oil producers in Africa.

Managing Director of Shell Nigeria Exploration and Production Company (SNEPCo), Mr. Bayo Ojulari, had said that building internal capability around marine investment is necessary to save a lot of wastages in the value chain.

30-40 per cent of investment (cost) in oil marine vessels could be saved if the front edge management is properly done. This can be achieved with front edge collaboration; sharing and capacity, Ojulaei said while fielding questions at a panel session at a conference in Abuja recently.

If the 40 per cent is saved through the application of building of internal capability around marine investment, it can. According to Ojulari, this can be reinvested into the sector and create avenues for more contracts, which we have been clamouring for.

Reduced operating cost and expenses could be achieved when stakeholders work seriously around collaboration, capability and technology, he added.

If they cannot work together in Nigeria, how could they work together in Africa? he quipped.

On the implication of lack of collaboration among stakeholders, the Shell boss said: It is crystal for me as an IOC to have projects because if we cannot have projects we will only be surviving on the crumbs on the table. So, another thing that this community of local service providers could do to making more projects embarked on is cost reduction.

Reacting to Ojularis comment, Chairman and Chief Executive, Starz Marine and Offshore Limited, Greg Ogeifun and his counterpart at ARCO Group, Mr. Alfred Okoigun, charged the IOCs to collaborate with the indigenous marine service providers for standard.

One of the reasons for competition is that the industry has not come to realise the need for a body where a uniform standard is administered, he said.

Mostly in the industry, what we have as ship owners is that the IOCs give jobs for the lowest bidders who meet a certain standard that are peculiar to the contractor not generally administered by a body.

I urge the IOCs to look into this issue critically because it also affects the overall performances of the industry, he said.

For the fourth time in a year, Angola has surpassed Nigeria as the largest exporter of crude oil in Africa.

According to the Organisation of Petroleum Exporting Countries (OPEC), Angola took over Nigerias lead, following Nigerias inability to meet up with its set targets for oil production.

Meanwhile, the crude oil and gas exports by the Nigerian National Petroleum Corporation (NNPC) hit $5.97 billion in one year.

The Corporation, which revealed this in its Monthly Financial and Operations Report for November 2018, said that it suffered 197 pipeline vandaised points in one month.

Posting a total crude oil and gas sale of $668.57 million last November, NNPC noted that the November 2017 to November 2018 crude oil and gas transactions indicated that crude oil and gas worth $5.97 billion was exported.

The $668.57 million recorded last November, the corporation said, is 26.13 per cent higher than the previous month. Crude oil export sales contributed $574.95 million (86.00 per cent) of the dollar transactions compared with $425.00million contribution in the previous month.

Export gas sales amounted to $93.62 million in the month, it added.

(c) 2019 Times of Zambia. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

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