HON NNPC SUBSIDIARY, NAPIMS MADE NIGERIA LOSE 75BILLION DOLLARS FDI

* NAPIMS stalls deep offshore projects, despite Buhari’s signing of PSC Act

* Appoints contractor that sued NNPC for over $31m as agent to lease Ikoyi Flats

Nigeria’s President Muhammadu Buhari last week raised the alarm at Nigeria’s share of paltry $3billion in the $75 billion Foreign Direct Investment (FDI) inflow to Africa between 2015 and 2019, saying it was a cause for concern, and therefore, unacceptable.


Reports in the Nigerian media showed that the president, who was represented by the Secretary to the Government of the Federation (SGF), Mr Boss Mustapha, spoke at a retreat organised by the Nigeria Extractive Industries Transparency Initiative (NEITI) in Uyo, the Akwa Ibom State capital.

“It is unacceptable – a situation where only $3 billion came to Nigeria out of the $75 billion investment in the extractive industry that came into sub-Saharan Africa,” Buhari reportedly said.

However, the Nigerian President did not know that the National Petroleum Investment Management Services (NAPIMS), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), which is under his own Ministry of Petroleum Resources, is largely responsible for Nigeria’s losses in FDI.

To encourage investors and remove the uncertainty in the operating environment around the development of oil and gas projects, President Buhari had on Monday signed the Petroleum Industry Bill (PIB) into law.

Before then, the Nigerian president who had also carried out other reforms in the oil and gas sector also signed the amended Production Sharing Contract (PSC) Act to encourage investments in the deep offshore.

The aim of signing the PSC Act was principally to provide a conducive operating environment that will be a win-win situation for the NNPC and the international oil companies (IOCs) to launch new deep offshore projects.

However, the Nigerian oil and gas industry stakeholders have raised the alarm that NAPIMS has stalled the implementation of all the major PSC projects that could attract $55 billion investments into Nigeria’s oil and gas sector.

The captains of the Nigerian oil and gas industry have also described as scandalous, NAPIMS’ appointment of Contraco Nigeria Limited as its agent in the lease of 10 flats at Ikoyi, Lagos.

Contraco Nigeria Limited dragged NNPC, the parent company of NAPIMS, to court demanding more than $31 million over the Egina deepwater project.

NAPIMS is currently negotiating to lease 10 flats at 27B, Oyinkan Abayomi Drive (formerly Queens Drive) and it appointed Contraco Nigeria Limited, which is in court with the NNPC, as its agent in the transaction.

Contraco claimed that it consulted for Hyundai Heavy Industries (HHI), which lost out in the Egina project.

In the Suit Number LD/3485CMW/2018, Contraco is demanding $31 million from the NNPC and others, which it said represents “the 1% commission Contraco would have realised having fulfilled its obligation under the consultancy agreement but for the internal interference of the defendants with the consultancy agreements.”

It is demanding “an interest on the said sum at 11% per annum from the date of judgment until payment of judgment sum and N30 million cost of the action.”

Before it filed the suit before Justice SS Ogunsanya of a Lagos State High Court, demanding for over $31million from the NNPC, Contraco Nigeria Limited, had written the corporation, threatening to sue it for $200 million claims.

It is feared in the Nigeria’s oil and gas industry that the new alliance between NAPIMS and Contraco could be responsible for the non-implementation of new deepwater projects in Nigeria.

Since the development of Egina project, which is producing 200,000 barrels of crude oil per day by Total Upstream Nigeria (TUPNI), no IOC has been given approval to develop any other PSC project in Nigeria, despite the signing of several deals for project implementations.

Some of the stalled deepwater projects include: Preowei Field Development by Total Upstream Nigeria (TUPNI); Owowo Field Development by ExxonMobil (Esso); Nsiko Field Development by Chevron; Agbami Gas Commercialisation Field Development by Chevron (Star Deep Water); Bonga North Development by Shell Nigeria Exploration and Production Company (SNEPCo); and the Bonga Main Development, also by SNEPCo.

Some of the officials of the IOCs, who gathered at one of the private sessions at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, United States of America, have narrated their frustrations in the hands of the current NAPIMS leadership.

They accused the NNPC’s Group General Manager in charge of NAPIMS, Mr. Bala Wunti, of allegedly sabotaging the interest of the NNPC and the efforts of President Muhammadu Buhari’s administration.

The officials, who commended the Group Managing Director of NNPC, Mr. Mele Kyari, for launching the process of reactivating the deep offshore projects, however lamented that NAPIMS has frustrated the implementation of the various projects.

According to them, all the projects that had reached advanced stages when the current management of NAPIMS assumed duties in early 2020 have been stalled.

“The President in his wisdom signed the amended PSC Act. To show the urgency of the time – the urgency for Nigeria to stop the relocation of projects to the neighbouring countries, Mr. President signed the PSC. “But he doesn’t know that NAPIMS under his ministry has frustrated all his efforts. All the projects on the drawing board have remained on the drawing board. “Nothing has moved forwarded except the signing of papers,” a senior official of one of the IOCs lamented at the private session in Houston.

Another official of one of the IOC at the event also narrated how NAPIMS wanted to lease 10 flats at 27B, Oyinkan Abayomi Drive (formerly Queens Drive) and appointed a contractor that sued NNPC for $31 million as its agent.

He described NAPIMS’ action as act of sabotage against the NNPC and Nigeria.

“A contractor claimed that it lost out in the Egina project and dragged NNPC and others to court demanding for over $31 million. And NAPIMS went behind to appoint the same contractor as its agent to lease 10 flats at Ikoyi? What is going on in Nigeria? Do we call this conflict of interest or plot to defraud the NNPC and by implication, the Nigerian government? It is a case of conspiracy against Kyari and the NNPC. It is an act of sabotage and lack of patriotism. The interest of NAPIMS is against national interest. The guys there have connived to work against the NNPC and against President Muhammadu Buhari’s administration. This is a conspiracy against all of us – the IOCs and against all the deepwater projects,” one of the IOC officials explained at the event.

He disclosed that during the negotiations for the Egina project transaction between 2013 and 2015, Wunti was the Senior Special Advisor, Technical, to the Group Managing Director of the NNPC.

According to the IOC official, the impression among the IOCs is that NAPIMS has colluded with other forces to ensure that no deep offshore project comes on stream in Nigeria during the tenure of Kyari.

“When some of us pressed them (NAPIMS) harder to allow us advance our projects, according to Kyari’s instructions, one even boasted that Kyari’s tenure would soon end. NAPIMS operates as if they have direct access and take instructions from authorities higher than Kyari,” the IOC official further lamented.

Despite having the biggest economy in Africa, Nigeria only received four per cent, which was about $3 billion of the $75 billion invested in the continent in the first term of Buhari’s administration.

According to the United Nations Conference on Trade and Development (UNCTAD) 2020 World Investment Report, FDI flows to Nigeria showed a 48.5 per cent decrease compared to the previous year.

Meanwhile, some of the IOCs have also called on President Buhari to look inwards into his ministry to tackle the bad eggs frustrating his efforts to attract investments.

NAPIMS appears determined to taint Kyari’s record of high performance and accountability.

“NAPIMS has stalled all deep offshore projects and nobody is willing to discuss this issue openly for fear of victimisation. Kyari has rallied all the IOCs to activate projects but one man frustrated all these projects and nobody is doing anything,” he added.

Edwin writes from the ongoing Offshore Technology Conference (OTC), in Houston, Texas, United States

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