- Senate tackles banks over oil firms’ $63b capital flight
The $558 million (about N200.8 billion) assets of an indigenous company, Neconde Energy Limited, a member of the Obijackson Group and operator of the Oil Mining Lease (OML 42), is set to come under serious risk, as Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) threatens to picket the company, on May 15 (today).
The Management of Neconde Energy Limited, a member of the Obijackson Group indicated this while raising the alarm that the PENGASSAN threat if carried out could also further frighten away, the much sought after foreign direct investment in the country.
The Managing Director of the company, Mr Frank Edozie, told newsmen on Sunday in Lagos that management was disturbed that the Union was threatening to picket his company ,over issues relating to severance package, in spite of the fact that Neconde had kept its own side of the bargain with PENGASSAN.
Cautioning against the picket plans, Edozie explained that in March 2016, Neconde and PENGASSAN entered into an agreement over welfare issues, including increased severance package, transfer and 13th month allowance with a caveat that the agreement will only be implemented once production hits 70,000 Barrels Per Day (BDP).
However, he expressed surprise that despite the fact that the current production level remained at 15,000 bpd, PENGASSAN in alliance with some workers of Neconde have concluded arrangement to picket the company on May 15.
The Neconde boss said that a component of its strategic goal for the year to achieve the 70,000bpd target has led it to develop “barged production” as an alternative to crude evacuation using the Trans Forcados Pipeline which has been out of service since Feb. 13, 2016.
“We have also undertaken some strategic steps, such as rehabilitation of Batan and Odidi Flow Stations to enable the achievement of our targeted peak gross production rate.
“Revamping of Jones Creek and Egwa Fields for work over of existing wells and development of other infrastructure which includes refurbishing a gas Central Processing Facility (CPF) in Odidi as well as commencement of re-entry of Odidi, Jones Creek fields Egwa 1 & 2.
“Despite the idle state of the asset, he said the company has remained committed to workers welfare and prompt the payment of salaries, especially during the period when oil prices remained at its lowest ebb.
“Additionally, we had to relocate our operations to Warri from Lagos, for us to be closer to the base to better enable us to meet our goals of increasing our contributions to the Nigerian economy.
“Expectedly, this relocation meant redeployment of employees to the new location, and this was executed in a manner that the associated inconveniences to employees were duly considered and properly mitigated,” he said.
“We are currently in talks with the leadership of PENASSAN to ensure that we reach a mutually beneficial agreement on some of the demands presented by the association.
“The management provided the association with an update and called for a meeting to discuss any remaining potential areas that may still exist.
“So far, management and the company have enjoyed their co-operation and hope that the association will continue to abide by best-in-class labour union practices by exploring negotiation and collaboration as labour relations tactics”, Edozie explained further, adding that Neconde, an indigenous Exploration and Production company with strong management and extensive in-country experience, is fully aware of the challenges facing the sector, as a key Nigerian player.
He said that the company’s goals and aspirations include creating value from every constituent of stakeholder network which includes employees and host communities.
Speaking in same vein, the Chairman of Obijackson Group, Mr Ernest Azudialu-Obiejesi, also expressed shock that PENGASSAN could decide on shutting down the offices of the company even after agreeing with the union that by August 2017 they would review the review package and salaries.
Azudialu-Obiejesi who assured that the agreement reached in March 2017, regarding the review of the severance packages, would be implemented, said the company was already over stretched, meeting the loan repayment conditions of 10 banks, could ill afford any disruption of work now.
“In March, we agreed with the union that by August 2017, we will pay the severance allowance and the 13th month salary based on our projections that by then we would have achieved our 70,000 bpd target’’.
“We owe 10 banks from which we obtained the $558 million we paid Shell in 2012 for 45 per cent stake acquisition of OML 42.
“We have also invested billions of dollars to develop the field but due to unfortunate incidents of pipeline attacks by the militants last year, we have been having cash flow challenges and the banks are also on our neck to service the loans.
“We have over 2,500 workers on our payroll and despite not producing at optimal capacity, we are not owing salaries,’’ he stated further, stressing that the effect of any strike action on Federal Government efforts to attract investment into the economy, would be devastating, as investors, local and foreign deprived of confidence could be further frightened away.
In the meantime, the Senate is investigating some banks for alleged collusion with some international oil companies (IOCs) to defraud the country.
Over $62,909,716,417 is said to have been taken out of the country under suspicious circumstances between August 2009 and December 2014.
The “Investigation of the pre-shipment inspection of export activities in Nigeria” is being conducted by the Senate joint committee on Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, Insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.
A document obtained by The Nation showed the banks were asked to submit copies of certified Nigeria Export Proceed (NXP) issued/or processed by them in respect of all crude oil and gas exported by Nigeria Agip Company Ltd, Chevron Nigeria Limited, Shell Petroleum Dev. Co. Nig. Ltd and their affiliates between April 1996 and December, 2016.
The banks are to submit all domiciliary accounts opened and /or closed within the period specified for crude oil and gas exported.
Two banks – Citibank and Standard Chartered Bank – appeared at the investigative joint committee on Thursday. Other banks said to be associated with the export of oil and gas will also appear.
A member of the committee, Senator Yusuf Yusuf (Taraba State), queried why funds brought into the country as oil export proceeds were wholly withdrawn a day after such proceeds were brought.
He said the probe became necessary because the banks should have ensured petroleum products exporters did the right thing by obeying the guidelines and laws of the country.
Yusuf said: “It is worrisome that money comes in today, tomorrow the same amount goes out of the country. The practice runs through statement of account submitted by the banks. The oil companies bring in $20 billion today and tomorrow $20 billion is taken out from the account.
“The banks are colluding with multi-national oil companies to defraud the country. The government relies on the banks; the banks are now colluding with the multi-national oil companies.”
He noted that it was obvious the country was not getting the correct export proceeds from oil and gas exports.
The lawmaker, who insisted that banks had the responsibility to abide by the law, said it was worrisome no indications were made about who paid for oil exports.
He noted that the committee was interested in why same company exports and pays for products without an indication of who actually buys the products and the corresponding bank.
The Chairman of the joint committee, Senator John Enoh, said the committee was interested in ensuring that banks are not colluding with IOCs to flout the laws of the country.
Enoh said the committee would take a critical look at the submissions made by the banks to come to terms with the true position of oil and gas exports proceeds processes.
A document submitted to the committee, which was obtained by The Nation, showed that Citibank Nigeria operates domiciliary export proceed accounts for ENI Group (three accounts), Chevron Group (six accounts) and Shell Group (two accounts).
The document also showed that Nigerian Agip Oil Company recorded a total export inflow valued at $15,372, 882,703.36
Chevron Group recorded $44,020,596,289.99. Shell group made a total inflow valued at $3,516,237,425.79 giving total of $62,909,716,417 billion.
The committee resolved to screen documents submitted by the banks before coming up with its recommendations.
The committee expressed its determination to get to the root of pre-shipment inspection of export activities.
Additional report from Nation