Group Accuses Totalenergies, NNPC of Breaching Local Content Law, Escalation of Production Cost

Peter Uzoho

The Community Development Committees (CDC) of Niger Delta Oil and Gas Producing Areas has condemned alleged moves by Totalenergies Upstream Nigeria Limited, operators of the Oil Mining Lease (OML) 130 in cahoots with the Nigerian National Petroleum Company Limited (NNPC) to undermine the country’s local content laws.

CDC in a statement issued yesterday by its Corporate Affairs Manager, Kingsley Arthur, expressed concerns that Totalenergies was conniving with NNPC to escalate the cost of hiring a rig for OML 130 by as much as $107,500 daily, to satisfy their alleged local and foreign interests.
The group claimed that such alleged corruption was the reason Totalenergies Upstream Nigeria Limited would produce a barrel of oil in Nigeria at $40 and produce the same barrel for $20 in Angola where it also operates.

The statement came in the wake of revelations that the leadership of the NNPC and Totalenergies were about aborting the contract earlier awarded to a local contractor, Palmeron in favour of a foreign entity.

CDC lamented that the action by Totalenergies and NNPC in OML 130 showed why the production cost of oil in Nigeria had continued to escalate in comparison to other nations.

“There are several issues to be learnt from the ongoing move by Totalenergies/NNPC in the matter of the rig for OML 130 that border on economic sabotage. We are shocked that after a contract had been won through due process by a local contractor that Totalenergies/NNPC would want to award the oil rig contract to another entity that did not bid for it not minding that it would be at a higher cost.

“This vexatious move by Totalenergies/NNPC to inflate the cost of the rig for OML 130 is exactly the reason why the unit cost of producing a barrel of oil in Nigeria is almost $40 compared to the $20 the same Totalenergies expends in Angola.

“Besides this economic cost on Nigeria, we also observe that the move by Totalenergies/NNPC is a deliberate violation of the nation’s local content law”, CDC said.

It added, “We call on the authorities and particularly the Nigerian Content Development and Monitoring Board (NCDMB) to examine this provocative act by Totalenergies/NNPC to weaken the move by Nigerian businesses to advance the country’s capacity in the oil and gas industry.

“We want to put the authorities at Totalenergies and NNPC on notice that Nigerians are watching and would not sit back and see a few of their compatriots collaborate with foreign interests to undermine our collective wellbeing of the people.”

When contacted for his company’s response, the Country Communications Manager, TotalEnergies Country Services in Nigeria, Dr Charles Ebereonwu, told THISDAY that the allegations bother on the same issue he had responded to in a previous enquiry by this newspaper, adding that his response remained the same.

“This should be the same issue I responded to in your earlier email.
It’s same subject. My response remains the same, please”, Ebereonwu stated.

THISDAY had penultimate week reported similar claims from a group called the South South Reawakening Group (SSRG).

In an email response to the allegations at the time, Ebereonwu had stated that the statement related to an ongoing confidential, commercial transaction and  matters which were subject of an ongoing lawsuit.

He had added that Totalenergies was therefore, unable to comment, and reserved all of their legal rights.

However, NNPC refused to respond to the allegations by the CDC as all calls put across to the company’s Spokesman, Mr. Garba Muhammad were snubbed as of the time of filing in this report.

Meanwhile, when contacted by THISDAY, to know the position of the Nigerian Content Development and Monitoring Board (NCDMB) on the matter, the agency’s Communications’ Manager, Mr. Esuene Dan Kikile, said the board was yet to receive any official communication from the affected communities of OML 130 on the issue, for investigation.

“NCDMB has yet to receive any official communication from the affected communities of OML 130 on the issue for investigation. It is until we have such communication and concluded investigation on the matter that we can make a pronouncement on the issue”, Kikile said.