The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kolo Kyari, held a meeting recently with the management of Midwestern Oil and Gas Limited, at NNPC headquarters in Abuja as part of the renewed efforts to resolve the challenges of Nigeria’s oil and gas industry.
The meeting provided opportunity to chart solutions that lead to the industry’s success.
Charles Odita, Group Managing Director/CEO, Midwestern, who declared support for the NNPC new GMD’s transformation agenda, enumerated some challenges faced by operators in the industry, adding that the current spate of pipeline vandalisation coupled with a high rate of crude theft was stunting the sector’s growth.
According to him, over 40 per cent loss of crude was experienced about three months ago and this amounts to significant revenue loss to companies and the government.
He acknowledged the government’s efforts towards addressing this issue, and urged that more effort be put into this to tackle and reduce if not eradicate these thefts.
In addition, Odita identified Over Riding Royalty Interest (ORRI) computation as another major challenge confronting the industry.
The Chief Executive Officer of Midwestern noted that in the past, when the laws were written, it was stated that ORRI payment was based on production at the well head.
“As at then, this was exactly the same volumes as injection at terminal. Over time, companies have recorded significant difference between wellhead and terminal injection due to losses and crude theft as such he proposed that NNPC should compute ORRI based not on wellhead production volumes but on terminal injection”, he said.
He also used the opportunity to invite the GMD for a visit to its facility in Kwale Delta State, to showcase the company’s growth and re-affirm what indigenous companies can do, have done and will continue to do if given better opportunities.
He indicated the company’s interest in future marginal field bid rounds.
In his response, the GMD while acknowledging Midwestern as being the most successful marginal field, encouraged the oil firm to set its sights on greater things including the possibility of getting an oil block to further demonstrate its capacity beyond the marginal field space, while promising to consider issues raised within the boundaries of the law.
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Source: INDEPENDENT BUSINESS FEED