Nigeria Oil Production in Limbo As NPDC Workers Shuts Production

Yemisi Izuora
NNPC LOGO
Nigeria oil production is likely going to encounter major set backs as employees of the Nigeria Petroleum Development Company (NPDC) the production arm of the NNPC have shut down oil production.

The workers are angry that the management of the company failed to reverse the alleged transfer of the operatorship of one of the country’s priced oil fields, OML 42, to Neconde.

Workers, under the aegis of petroleum and Gas Senior Staff Association and the National Union of Petroleum and Natural Gas Workers, are calling for the reversal of the award of the operatorship right back to NPDC.

They claimed that the NPDC,
contrary to reports, have the capacity and competence to operate the said field.

The union workers are angry that they were not carried along by
management in the entire process, and are also of the misconception
that management’s decision would not only threaten their jobs, but will jeopardize the future of the industry.

The action has affected all NPDC operated assets that are in a joint
venture with indigenous companies that have applied for operatorship, except for Neconde, who, prior to the crisis, had been awarded the operatorship of OML 42 and, immediately got the JTF to secure it’s assets.

Elcrest (OML 40 ) which is next in line to be awarded operatorship , Shoreline OML 30 and FHN/Afren (OML 26) have now been shut in. And oil evacuation is hampered from OML 34 which relies on the OML 30 pumping station.

This, experts claim would have a devastating effect on Nigeria’s
already crippled economy.

According to the CBN Governor, Godwin Emefiele, “Nigeria has faced continued pressure from spiraling debts, in the face of dwindling revenues resulting from falling global crude oil
prices.

Foreign reserves have slumped
to about $29.9 billion as at March ending.”

If the industrial action is allowed to persist, it will also affect the
power sector as NPDC supplies at least 30 per cent of gas required to
generate electricity.

Over the years, NPDC have been under constant attack for lacking the requisite technical competence and financial muscle to operate the
assets in contention effectively and efficiently.

Under NPDC’s operatorship, all the oil fields have taken a nose-dive in production volumes; obligations to communities have not been met; sharp drop in revenue, etc.

All the indigenous companies that are in a JV with NPDC have suffered from the poor performance of NPDC since acquiring the licenses.
they all have lamented NPDC’s lack of capacity to continue
as the operator of the acreages they purchased from the Shell-led
consortium.

Their argument is that they could have gotten more production out of the fields than NPDC was doing as operator.

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