NUPENG threatens strike over agreement violation

Nigerians may have to go through another fuel crisis soon should the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) go ahead with its threat of shutting down operation in the downstream sector in protest against the alleged violation of agreement with Chevron Nigeria Limited.

The union yesterday issued seven-day ultimatum to the management of Chevron to correct all the anomalies or face industrial action by the union.

Its President, William Akporeha, and General Secretary, Afolabi Olawale, said in a statement that the leadership of NUPENG would like to alert the public and all relevant authorities to the violation of agreement between Chevron Nigeria Limited Company and the unions in the industry.

“It is a public knowledge that the unions in the oil and gas industry had a protracted negotiation with Chevron Nigeria Limited on 70 per cent manpower reduction which they (Chevron) claimed was required in view of the so -called reduction in their operations in the Nigeria oil and gas Industry.

“The unions in the Industry (NUPENG and PENGASSAN) vehemently opposed this unpatriotic and inhumane move in view of the avowed commitment of the unions to the protection of jobs of our members and considering the high level of unemployment in the country which is directly responsible for the heightened insecurity and tensed situation in the country,” they said.

The union said the intervention of Nigerian National Petroleum Corporation (NNPC), National Petroleum Investment Management Services (NAPIMS) and Ministry of Labour led to the signing of the agreement after a year of negotiation. But lamented that Chevron started executing the exercise in blatant violation of the agreed terms and has already sacked 500 members of NUPENG, including its executives, an act the union said was done to put NUPENG in bad light or for its extinction as only the NUPENG members have been disengaged from work, leaving behind the non-unionised workers and PENGASSAN members.

“We further learnt that the intention of Chevron is to change the contract to short-term service contract and we see this as unfair and breach of agreement reached with us in bad faith”, the statement added.

The union, however, said the strike could only be averted if its sacked executives are reinstated, the percentage of reduction agreed spread to the three groups as agreed, to avoid creating the impression that NUPENG was the target of the exercise.

It warned that Chevron should not be allowed to use the exercise to change the labour manpower contract to service contract in a disguised manner.

It stated further: “Consequent on the above demand and having been pushed to the wall, NUPENG hereby puts all our members on red alert should Chevron and its contractors fail to honour or comply with our demands within the next seven days, we would also not hesitate to take all necessary legal options available to us; including industrial actions to press home our legitimate demands.”

SOURCE: today.ng

15 oil firms to lift Nigeria’s crude, deliver 14 billion litres of products

The Nigerian National Petroleum Corporation (NNPC) on Sunday disclosed that 15 oil firms comprising international companies and Nigerian downstream players have been selected to offtake crude oil and in return, deliver corresponding petroleum products of equivalent value (about 14 billion litres) to the corporation under the 2019/2020 Direct Sale, Direct Supply (DSDP) deal.

The Group Managing Director of the NNPC, Mr Mele Kyari, who made the disclosure in a statement, said the announcement of winners was consistent with its commitment to transparency and accountability in all its activities.

He explained that the winners emerged following a rigorous process that proved their financial buoyancy, experience and technical capacity to deliver to taste.

The contract, he added, is for one year effective October 1, to September 30, 2020.

The successful companies are: BP Oil International Limited/AYM Shafa Limited, Vitol SA/CALSON-HYSON, Totsa Total Oil Trading SA/Total Nigeria Plc, Gunvor International B.V./AY Maikafi Oil And Gas Co Ltd

Trafigura PTE Ltd and A.A Rano Nigeria Ltd. Others are Cepsa S.A.U./Oando Plc, Mocoh SA/Mocoh Nigeria Ltd, Litasco SA/BRITTANIA-U Nigeria Ltd LTD./Freepoint Commodities, MRS Oil & Gas Company Ltd; Sahara Energy Resource Ltd; Bono Energy Ltd./Eterna Plc/Arkleen Oil & Gas Ltd./Amazon Energy; Matrix Energy Ltd./Petratlantic Energy Ltd/UTM Offshore Ltd./Levene Energy Development Ltd, Mercuria Energy Trading SA/ Barbedos Oil & Gas Services Ltd./Rainoil Ltd./Petrogas Energy, Asian Oil & Gas PTE Ltd./ Eyrie Energy Ltd./Masters Energy Oil & Gas Ltd/Casiva Ltd and NNPC’s subsidiary, Duke Oil Company Incorporated.

Each of the aforementioned firms are to provide proof of financial liquidity of $72 million at the minimum, in addition to cognate experience in crude oil marketing and petroleum products import.

The release further explained that the tender process comprised technical and commercial bid submission respectively, evaluation and shortlisting, then commercial negotiations with pre-qualified companies and engagement of the successful consortia/companies by NNPC.

The NNPC received 132 bids for the 2019/2020 DSDP contract, unlike 128 received in 2018.

It notes that the scheme, since inception in April 2016, has ensured significant reduction in product demurrage cost up to 84 per cent and cost savings of about $2.2 billion.

About 39.6 billion litres of petroleum products (representing over 90 per cent of national requirement) have been supplied since the inception of the DSDP scheme from April 2016 to March 2019.

The scheme involves the enlistment of a robust supplier mix, comprising big international players and strong Nigerian downstream companies for supply flexibility and local capacity development.

The programme, according to the NNPC, was designed to plug loopholes recorded in previous Offshore Processing Arrangement deals.

In his takeover note on July 8 as NNPC GMD, Kyari promised to open NNPC books to public scrutiny, saying as a publicly-owned company Nigerians deserve to know about its day-to-day operations.

He also reiterated his management’s commitment to transparency and accountability when he had a maiden town hall engagement with the staff of the Corporation where he launched the team’s policy direction tagged: Transparency, Accountability, Performance and Excellence (TAPE).

SOURCE: today.ng

$9.6bn Judgement Debt – Govt to Push for Abrogation of Huge Cash Award

As Nigeria goes on appeal to set aside the huge cash awarded by a British commercial and arbitration court to an offshore compaany over a botched gas supply contract, indications emerged, weekend, that the government might have written off the claimant as non-existent enterprise.

The government is said to have been convinced by several documents at its disposal that the company, which claims to be registered in Nigeria and abroad, merely exists in the minds of those trying to extort money from Nigeria for rendering no service.

The argument of the government, Vanguard learned, stems from the fact that Process and Industrial Development Limited, P&ID, which claimed to have entered into a multi-million naira gas supply business with Nigeria does not have any registered presence anywhere.

Citing a document filed in court by the company, a top government official said the address of a multimillion naira company involved in engineering and gas procurement business was simply “using a lawyer’s office and post office box as its corporate address.”

The court document sighted by Vanguard last night shows that P&ID’s address in Tortola is attached to ‘Trident Chambers, P.O. Box 146 with no physical complex of its own in the BVI.

Similarly, efforts by a team of Economic and Financial Crimes Commission operatives to locate its Nigerian address quoted in the court paper as 12, Vaal Street, Maitama, Abuja, has proved abortive.

“There is no such office in Maitama and the people we found there have no idea of such a company operating in the place,” a top EFCC official confirmed last night.

Vanguard gathered last night that the government is likely to argue that the controversial entity does not deserve to be awarded such huge amount, especially as it does not have any known presence either in Nigeria or anywhere else.

It is also to argue that the company didn’t bring any capital importation into the country and never invested a dime to warrant any compensation.

It said: “This government will not negotiate with questionable characters who are merely seen to be actively trying to extort money from the government and people of Nigeria.

“It is obvious from the documents available before us that some elements in Nigeria have connived with some foreign collaborators to rip off the commonwealth of Nigeria.”

How project failure affected Addax Petroleum’s plan to end gas flaring

Meanwhile, the failure of the controversial P&ID’s gas pipeline project scuttled the plan of Addax Petroleum Nigeria Limited to end associated gas flaring in Oil Mining Lease, OML 123.

Investigation by Vanguard, weekend, indicated that OML 123 is Addax Petroleum’s largest licence area, located offshore approximately 60 kilometres south of Calabar, Cross River State and covers an area of 90,700 acres (367 km2), with nine producing oil fields – Adanga, Oron West, North Oron, Ebughu and extensions, Adanga North Horst, Inagha, Kita Marine, Bogi and Mimbo.

Addax Petroleum, which started operations in Nigeria after signing two Production Sharing Contracts, PSCs, in 1998, with the Nigerian National Petroleum Corporation, NNPC, had concluded plan to harness and deliver 100 million standard cubic feet, scf of associated gas to P&ID Limited for processing.

The top management personnel of the company, including the managing director, Mr. Yonghong Chen, did not take telephone calls nor respond to emails, when Vanguard contacted them repeatedly for comments, yesterday.

But a source in the Department of Petroleum Resources, DPR confirmed that associated gas flaring has not ended in OML 123.

Why P&ID selected Addax

The founder of P&ID, Michael Quinn, who explained how Addax Petroleum was selected as gas supplier recently said: “From information available in the public domain and from our own researches, it was clear that there was more than enough Wet Gas off the coast of Calabar to support a gas stripping and propylene plant operation in the Calabar area processing a Wet Gas throughput of 400 MMSCuFD We also became aware that the Government had initiated the building of a pipeline from OML 123 to Calabar (the Adanga Pipeline).

“At this stage we felt that we were in an excellent position to make a persuasive case to the Government to enter into an agreement to implement the Project. The President of Nigeria at that time was the late President Yar’Adua. He was also the Minister of Petroleum Resources, although he later appointed a separate Minister.”

He said: “In summary our proposal was that we would take Wet Gas free of charge from the Government, process it to produce Lean Gas, and return the Lean Gas to the Government free of charge to be fed into the national power grid, with the capacity to generate over 2,000 additional megawatts of electricity for the economy. The idea was for P&ID to generate revenue (and profit) from the NGLs.”

He said: “There would be two phases. Phase 1 would be the construction by P&ID of the gas stripping plant which would separate the NGLs from Wet Gas, at the end of which process would emerge, amongst other by-products, propane, butane, condensate and Lean Gas. The propane, butane and condensate would be sold on the international markets for P&ID’s account, and the Lean Gas delivered to the Government free of charge. Phase 1 was planned to take two years to implement after the grant of the necessary approvals by the Government.

“Phase two would be the construction by P&ID of the polymer grade propylene plant. Once constructed it would use the propane produced by the gas stripping plant as a feedstock for the propylene plant to produce polymer grade propylene for sale on international markets. Polymer grade propylene is a valuable industrial feedstock for the manufacture of various different products, and would be expected to achieve a significantly higher price than the Propane. Lean Gas would continue to be delivered to the Government free of charge. Phase 2 was planned to take an additional 15 months to implement.”

Aftermath

He said: “The day after the signing of the GSPA, on 12 January 2010, I wrote to the Minister on behalf of P&ID to inform him that P&ID wished to commence work at once, and wished “to put in place all necessary modalities as soon as possible, with both Addax Petroleum and Exxon Mobil, in order to ensure the timely delivery of the currently flared Wet Gas for the project” (page 152 of MQ1). Given that P&ID had no contractual relationship with the IOCs, I requested the support and co-operation of NNPC, NAPIMS6, and the Director of the DPR to assist in finalizing these arrangements with the IOCs.Close

“I was keen to implement the GSPA as soon as possible. Moreover, although I was aware, of course, that the Government had, to all intents and purposes, access to virtually unlimited supplies of Natural Gas in the vicinity of Calabar, I wished to minimize any delay which might be caused by the operators of the 2 concessions that had been identified as likely sources of Wet Gas for the project. P&ID required from the Government certain up to date information which would be critical to the construction of the gas processing facility which P&ID would be building in Calabar to strip the Wet Gas.”

Site selection

He said: “In the meantime, the site for the onshore plant at Calabar for thise construction of the gas stripping plant and gas storage facilities had been selected by P&ID and secured from the Government of Cross River State. On 1 February 2010 Mr. Hitchcock wrote to the Governor in Calabar requesting the formal allocation of the land upon which the plant would be constructed (pages 157 to 158 of MQ1). On 16 February 2010 approval was granted, by the Government of Cross River State, to P&ID, for the allocation of Parcels 1 & 2 of the Energy City (Industrial) at Adiabo in Odukpani Local Government Area, containing an area of about 50.662 hectares of land, for the industrial use of P&ID (pages 159 to 160 of MQ1).”

Construction

Unfortunately, construction of the project did not commenced, a development which scuttled the initial plan to utilise associated gas from Addax Petroleum.

Read the original article on Vanguard.

09-09-2019

AGO

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