The Nigerian National Petroleum Company Limited (NNPCL) has signed a Shareholder Agreement with the government of Akwa Ibom State and Solutions Hub Limited to develop an integrated logistics hub that can service the Nigerian upstream oil and gas industry and the entire Gulf of Guinea.
The partnership which was sealed in Akwa Ibom State, is in line with strategies being taken by the NNPCL management to reposition the national oil company to operate commercially and deliver greater value for Nigerians.
Speaking at the event, the Chairman, Board of Directors of NNPCL, Senator Margery Okadigbo, said that as a national oil company transiting to a full-scale energy company, the NNPCL’s commitment to the Ibom Solution Hub signalled to potential investors and business partners that the company meant business.
She said at the event, which was attended by the Governor of Akwa Ibom State, Mr. Udom Emmanuel, that over the years, the Nigerian upstream oil and gas industry had been labelled as one of the most expensive to do business with, globally.
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Consequently, the NNPCL chairman said this had impacted the profitability of investments and the ability of the government and host communities to benefit from the value created from oil and gas exploration and production.
Okadigbo added that human relations, logistics, and direct handling costs represented almost 70 per cent of the total operating expenditure for the industry, with logistics costs contributing the most after human relations.
According to her, a further breakdown of the logistics costs shows that Marine Logistics accounts for the most significant component contributing about 44 per cent of costs.
With only two major centres in Nigeria that provide a shore base for logistics and other services for the oil and gas industry -LADOL in Lagos and INTELS in Onne, Port Harcourt, respectively, she stated that some of these costs could be attributed to a shortage of appropriate facilities where these services are required.
In recognition of these challenges, she told the gathering that the Nigerian government, under the leadership of President Muhammadu Buhari and the Minister of State for Petroleum Resources, Chief Timipre Sylva, directed NNPCL to work with all relevant agencies to democratise and increase the number of shore base locations equipped appropriately for effective and efficient service delivery at a competitive cost.