ERHC Energy's chairman, Sir Emeka Offor, owns what is probably the largest oil services firm in the country, Chrome Oil Services Ltd., which is now the nominee for his 303 million shares of ERHE stock. Offor was not mentioned in the story, nor were any others in the sector such as Fobi Engineering, a rival firm based in Port Harcourt, named in the speech.
The paper's headline seems somewhat misleading. His comments appear aimed more at Nigerian infrastructure needs than multinational trickery.
Here is the Financial Standard report:
FG warns multinational oil firms over sharp practices
by Samuel Ibiyemi
ABUJA -- The federal government has cautioned multinational oil firms operating joint venture (JV) and production sharing contract (PSC) fields in the upstream sector of the Nigerian oil and gas industry, to desist from uncompetitive practices responsible for increasing cost of exploration and production (E&P) activities.
If government succeeds in curbing these alleged malpractices, there would be an increase in the nation’s earnings from the oil and gas industry. It would also encourage emergence of local firms as manufacturers and suppliers of raw materials for the industry.
Dr Edmund Daukoru, presidential adviser on petroleum and energy matters, who gave this advice last week in Abuja at the Nigerian Oil and Gas Conference, said selection of service and material providers for multi-billion dollar projects from a small pool of contractors is responsible for the steady increase in cost of procurement for E&P activities in the country.
These, he said are inimical to the ability of the sector to meet the objectives of both government and industry. These objectives include attainment of 40 billion barrels (bbl) reserves in 2010; increase of production capacity from 2.6 million barrels per day (mbpd) to 4.5mbpd in 2010; elimination of gas flaring by 2008 and realising as much revenue from gas as from oil by 2010.
"I urge our partners to take urgent steps to address observed shortcomings that would pose serious challenges to our common aspirations", he said.
Daukoru said participation by more service providers is required to expand the contracting environment to enable Nigeria to contribute towards achieving global energy security. Besides, he said activities that were once regarded as core industry activities such as seismic acquisition, evaluation, reservoir engineering and drilling, are now fully outsourced thereby making rigs, for instance, unavailable when activities spring up at various regions of the world at the same time.
"More activities chase the same rig population leading to significant increases in costs as is set to face Nigerian oil and gas industry in the very near future", he said.
The presidential adviser added that functional experts who ensured that personal insights built up over many years played a key role in subsurface evaluation, reservoir engineering and production, have been systematically planned out and their roles taken up by computer systems to the exclusion of human know-how and experience.
He said the industry is now staffed more by legal experts and business school management types that only add to lack of core expertise and ultimately higher costs arising from bad project scooping, supervision as well as cost control.
"Success would depend entirely on our ability to innovate, apply technology, manage complexity and work together", he said.
No comments:
Post a Comment