NNPC GEC endorses multi-billion dollars Egina & Erha North 2

*SFDP 2 considered expensive

29 December 2012, Sweetcrude, Houston – The Group Executive Committee, GEC, of the Nigerian National Petroleum Corporation, NNPC has endorsed the multi-billion dollars Total promoted Egina project and the Mobil promoted Erha North Phase 2 project, indicating both projects may scale the 31st December 2012 bids validity extension secured last month.

Meanwhile, the Satellite Fields Development Project Phase 2 being promoted by Mobil has been considered too expensive by the NNPC GEC, and efforts are being made to scale down the cost.

Mr. Abiye Membere, the group executive director in charge of the NNPC crude oil exploration and production division made the disclosure in an exclusive exchange with Sweetcrude Reports.

His response follows an enquiry on the status of the Egina, Erha North Phase 2 and SFDP Phase 2 projects in view of the imminent expiry of the bids validity date for all the projects.

“All have been considered except SFDP 2 as the cost of the project is too high and NAPIMS and the operator are working with the objective of reducing the price,” he disclosed.

However, he Mr. Membere did not respond to whether or not the projects would beat the bids validity expiration deadline.

When contacted, Mr. M.A. Fidi, the Group General Manager in charge of NAPIMS, the NNPC investment arm declined to comment on the fate of the projects.

Checks revealed that Mr. Fidi is due for retirement from the services of the NNPC this month, paving the way for appointment of another to superintend the activities of NAPIMS.

The bids validity on these projects had earlier expired on November 9, but was shifted to 31st December 2012, with pressure from the NNPC management to get the cost of the projects reviewed downwards by Mobil and Total, promoters of the projects.

There had been claims and counter claims between both parties over cost, with the NNPC making spirited efforts to achieve cost reduction and the international oil companies on the other hand noting that the bids had gone through normal tendering processes and that there was nothing to reduce, anymore.

On how soon the NNPC Board approval can be secured to ensure the project already processed by the GEC meets the current bids validity, an official of the Corporation who spoke with us on condition of anonymity, explained that the Board endorsement was a mere formality.

“You must understand that members of the GEC are in constant touch with the Minister of Petroleum Resources, Diezani Alison-Madueke who doubles as chairman of the NNPC Board, and is constantly briefed on developments.

“Barring any last minute development, approval by the NNPC Board is usually considered a mere formality for projects already endorsed by the corporation’s GEC,” the official disclosed.

Both the Erha North Phase 2 and the Satellite Fields Development Project are valued at about $6 billion and are being promoted by Mobil Producing Nigeria Unlimited, a subsidiary of ExxonMobil Corporation, while the Egina Project valued at about $15 billion is being promoted by Total Upstream Nigeria.

It is expected that these projects will give traction to the much touted Nigerian Content Act through jobs creation, improvement in skills set and domiciliation of technology in-country.

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