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NIGERIAN CRUDE OIL AND GAS.
Nigerian oil and gas service companies get N130 trillion contracts from
Shell, says report
THE Anglo Dutch oil firm, under the aegis of Shell companies in Nigeria,
last year awarded contracts estimated at $900million (about N130 trillion)
to Nigerian companies providing services in various capacities to the group
in Nigeria.
Manager, Social Performance, Shell Petroleum Development Company of Nigeria
limited (SPDC) Mr. Emeka Obi, who revealed this at the presentation of
activities of the companies in Nigeria in Lagos, said that the objective of
Shell was to encourage Nigerian companies to grow to the level that a local
service provider would be able to provide services in rig operations without
having to engage foreign companies in that regard.
"In 2008, Shell-run companies awarded more than 90 per cent of all their
contracts in Nigeria-worth more than $900 million -to Nigerian companies. As
far as possible, we aim to use Nigerian contractors and hire workers from
the local communities where we operate."
In the information made available to The Guardian Shell said that its
operated ventures produced an average of more than 850,000 barrels of crude
oil per day last year representing 39 per cent of the country's total oil
and gas production.
The joint venture operated by SPDC contributed more than $34 billion to the
government in the last four years adding that the Federal government
received about 95 per cent of the revenue after costs from its onshore
production in the delta.
The report added that Shell Nigeria Exploration and Production Company
(SNEPCO) paid nearly $2 billion in tax and royalties over the same period to
the government.
The report also stated that in 2008, Shell commenced the start up of the new
650Megawatts (MW) Afam six power plants and the Okoloma gas plant in Rivers
State.
"When it hits full production sometime in 2009,this integrated project
according to Shell will increase Nigeria's electricity and gas supply by
about 20 per cent each.
The report also noted that in 2008, the four main oil producing states of
Akwa Ibom, Bayelsa, Delta and Rivers received about 33 per cent or $4
billion of all oil revenue that government at the central allocates to the
36 states of the federation.
The company added that last year its operations contributed $158.2 million
to the Niger Delta Development Commission (NDDC).
According to the report during the period in question, SPDC and the joint
venture partners contributed directly a further $48 million to community
development projects out of which Shell equity contribution amounted to
$25.2 million.
"We work together with government agencies, companies, local and
international Non Governmental Organization (NGOs), and the United Nations
Development Program (UNDP). SPDC also pays two per cent of its chargeable
profits into an education fund for the rehabilitation, restoration and
consolidation of education in Nigeria adding that the company paid
$17million into the fund, bringing the total investment in the past eight
years to over $186 million.
The report said that about 48,000 barrels of oil was spill last year in 140
incidents due to sabotage in what could be described as an average of one
leak every two and half days.
"About 40,000 barrels of this was the result of armed gangs blowing up
pipelines with explosives in 10 separate incidents."
It explained that the volume of spill was often made significantly greater
because communities frequently delayed the company's team from gaining
access to the site to stop the leak and start the clean up, pointing out
that this kind of delay occurred more than 40 times last year.
"According to our estimations-based on flow rates from damaged pipelines,
13,000 extra barrels of oil were spilled in 2008."
It added that in the same year, 53 spills involving 8,325 barrels about 15
per cent of the total volume spilled were the result of the failure of
equipment, corrosion or human error noting that this is lower than the
11,723 barrels recorded in 2007.
"Two incidents made up well over half the volume spilled. Both were on the
Trans Niger Pipeline near the Bodo community in Ogoni land spilling 4,140
barrels of oil as result of weld defect and corrosion.
The report explained that 650MW Afam combined cycle power plant is an
advanced design that requires only two third of the gas needed by many of
Nigerian's existing power plants to generate each unit of electricity.
"Afam V1 gas turbines generate up to 450MW of power. Waste heat from the
plant is used to generate a further 200MW of very low emission electricity.
