NAPIMS joint venture liability hits $7bn in 5 years

Dafe Sejebor, Group General Manager of National Petroleum Investment Management Services (NAPIMS) on Tuesday expressed concern over the company’s inability to service its joint venture financial obligation estimated at $7 billion over the past five years.

Sejebor stated this in Abuja at the opening of the investigative public hearing on the “alleged $260 million ‘illegal’ contract by NAPIMS”, organised by the joint House committees on Procurement and Petroleum Resources (Upstream).

“In the last five years, things really started going bad and we are really trying our very best to get them resolved off line. In short, we are at a cross road because when we approached the IOCs they simply told us that except we operate a base case budget before they can continue with us.

“And from my understanding of business, a case base budget is doing business without growth and we have to resort to cut cost on services to survive but some guys providing us services totally refused,” the NAPIM’s boss told the Committee.

Worried by the flagrant disregard for the resolution of the House via a notice for the investigative public hearing advert dated 31st March, 2016, chairmen of the joint committees, Victor Nwokolo, (PDP-Delta) and Oluwole Oke (PDP-Osun) unanimously directed ExxonMobil to revert back to status quo as at the date of the publication, and put every fresh commitments on hold pending the conclusion of the ongoing investigation.

Nwokolo who expressed disgust over the flagrant violation of the Public Procurement Act (PPA) as well as the Nigerian Local Content Act (NLCA), queried the rationale foe patronising foreign company at the expense of wholly owned indigenous company.

Speaking earlier, the petitioner, Stanford Tassie, Managing Director of Tilone Subsea, alleged that the logistic contract duly approved and given to his firm was unlawfully terminated by NAPIMS and given to GMT Energy Resources as against the provision of the Public Procurement Act as well as the Nigerian Local Content Act.

He said: “GMT Energy Resources was illegally awarded the same contract which negates the provision of the 2007 Public Procurement Act”.

He told the committee that his company was originally given the contract for a duration of 5 years which was extended by three more years and approved by President Goodluck Jonathan in 2010.

Tassie alleged that in that advertorial, the NNPC clearly stated that GMT vessel was used to replace Tilone vessel which originally handled logistics for ESSO during the drilling process.  

In his presentation, Rotimi Olubeko, ExxonMobil’s General Manager Procurement however alleged that Tilone was trying to create confusion in an attempt to either mislead the committees or misrepresent the facts as they are. 

 

“Looking at the presentation and the contract that we know of, I’m forced to say that Tilone was talking about a different contract. I really don’t know what the $260 million is about. We did not awarded any such contract nor are we aware of the existence of such contract.

“In our submission, we handled some jobs on behalf of the NNPC and NAPIMS and we delivered those jobs successful, one of which was delivered six months ahead of schedule. When Tilone wrote to us asking if we were going to activate the option of renewal as provided in the contract, we replied saying that, we will not because did not have any need for the vessel since drilling operation had stopped”, he said.

On his part, Alfred Temile of Temile Ventures Ltd told the committee that it was engaged by Exxonmobil (ESSO) and used a vessel flagged wholly with Nigeria colours.

He said the contract given was executed halfway when ESSO approached it saying that they wanted a renegotiation of the contract after obtaining $85 million loan facility from a bank.

He added that ESSO came back with a new offer which the company was not comfortable with, therefore appealing to the committees to intervene as the vessel is still in ESSO’s services.

The committee adjourned the public hearing till next Monday.