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New Regulation Likely To Cost Nigeria $48b Investment​s in Oil Sector

By on December 8, 2012

A bid procedure adopted by the Nigerian National Petroleum Corporation (NNPC) may cost the nation Investments in the oil and gas industry worth about $48 billion.

The process has disregarded all due and standard procedures in conducting bids for assets development in the industry.

It was learnt that NNPC ignored all stages regularly undergone during bid periods meant to make certain transparency.

Presently, the Corporation calls individual contractors openly to discuss costs of contracts. Multinational oil companies have threatened to dump some major projects, if the development is not stopped.

According to a letter from the Group Executive Director, Exploration and Production, Abiye Membere, to the multinational companies last month claimed that contracts have been collapsed into one and superintended by Membere.

It was gathered that, before now those contracts usually went through the National Petroleum Investment Management Services (NAPIMS) and others before getting to the Group Managing Director.

According to a source who spoke in confidence, Membere claimed that the new bid approach is meant to lessen cost of projects’ execution.

Continuing, he said, multinationals frowned at the development because it does not support the sanctity of agreement on contracts

“If the multinationals make good their threat, the ExxonMobil’s Erha North Phase 2 put at $5 billion, and Satellite fields Phase 2 also estimated at about $5 billion, Shells Bonga SW/NW estimated $8 billion,

“Total’s Egina field put at about $8 billion, Chevron’s Funiwa Gas Project estimated at $3 billion, Brass LNG estimated at between $12 million – $15 million and Nsiko project also put at about $4 billion, bringing the total projects threatened for abandonment to about $48 billion”.

“Who said that?” was Membere’s reply when he was contacted.