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NNPC, Shell disagree over $700m loss claim

By on August 8, 2013

The Nigerian National Petroleum Corporation on Tuesday refuted the claims that Royal Dutch Shell, an international oil company with operations in the country, lost $700m in the second quarter of this year due to oil theft and disruptions in Nigeria.

The NNPC, according to a statement signed by its Group General Manager, Group Public Affairs Division, Ms. Tumini Green, said the loss claims were not localised to Nigeria as reported by Shell.

She said, “Shell’s acquisition of shale oil and gas assets in North America has also proven not to be good investments, and as such, programmed for divestment to minimise risk. In order to further buttress the global challenges, Shell’s current tight oil output is 50,000bpd as against an estimated 250,000bpd in the United States.

“Furthermore, ExxonMobil’s Q2 2013 earnings were down substantially by 57 per cent year-on-year primarily due to prior year gains, Japanese restructuring and divestments.”

She argued that divestments by the IOCs from the Nigerian oil and gas sector were management strategies employed to restructure and reposition their companies for better and efficient revenue growth and competition.

“Against this backdrop, it is misleading to relate the strategic divestments as due to the absence of leadership in the oil industry. These divestments have in fact increased indigenous participation, which will in turn create new job opportunities, reduce capital flight, encourage capacity building and support gas-based industrialisation aspirations,” Green said.

Green argued that the combined efforts of the Federal Government and the IOCs to stem the problems in the sector had led to a significant drop in the level of pipeline vandalism and crude oil theft, thus resulting in a corresponding increase in daily crude oil production.

“Suffice it to say, some vandalised pipelines and flow stations have been repaired and re-opened such that the average current national daily production stands at 2.4 million barrels per day compared to the average year-to-date figure of 2.13mbpd as of June 2013,” Green said.

The NNPC spokesperson said an industry-wide committee on security strategy against crude oil and product theft was responsible for the recent success recorded in oil production.

According to her, the committee members include representatives of the NNPC, all the IOCs, the Nigerian Petroleum Development Company, security agencies as well as the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry.

Green added, “In a fortnight, repair works on the Nembe Creek Trunk Line, which has a daily capacity of 150,000bpd, is expected to be fully completed. On completion, the daily average crude oil production is expected to increase to 2.50mbpd, which will exceed the national daily target of 2.48mbpd.

“Our expectation is to increase production from the 2.48mbpd to 2.55mbpd (both crude and condensate) for the rest of the year. We have the capacity and potential to maintain production above 2.55mbpd in the country. All that is required is to continue the fight against pipeline vandalism and crude oil theft to achieve this target.

“This will increase our 2013 average production to about 2.34mbpd if the current fight against pipeline vandalism and crude oil theft is sustained.”

 

 

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