NNPC: No Plan to Pay N36bn Compensation to Port Harcourt Refinery Host Community

NNPC: No Plan to Pay N36bn Compensation to Port Harcourt Refinery Host Community
NNPC Tower

 Report: Oil thieves forced 150,000bpd Nembe creek trunk line to shut down for 122 days in two years

The Nigerian National Petroleum Corporation (NNPC) yesterday dismissed insinuation that it planned to pay N36 billion compensation allegedly due to Alesa-Eleme community in Rivers State as royalty for playing host to its Port Harcourt Refining Company.

NNPC said in a statement by its Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, in Abuja that such report was a hoax which originated from a traditional ruler regarded as a claimant to the Alesa-Eleme traditional stool.

It alleged that the said traditional ruler went to town with the fake story after a purported meeting with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, adding that it had checked with Kachikwu to confirm that there was no such meeting at which he made the promise of a compensation payment to the community.

NNPC explained the story was fabricated to cause disharmony between it and Alesa-Eleme community which it said has being a good host to it.

The corporation said through the years, the refinery had enjoyed cordial relations with all the 10 communities in Eleme where it is located, including Alesa Eleme and Alade Eleme, through an existing Joint Community Relations committee (JCRC).

NNPC said the JCRC, comprising representatives from the various interest groups of the community, had been relating with the management of the refinery on a sustained basis for creation and execution of development projects and needs of the communities.

It asked the community members to discountenance the reported plan to pay out N36 billion compensation as there was no such approval or payment to any entity.

Meanwhile, a status report on the operation of the Nembe Creek Trunk Line (NCTL) has indicated that the 150,000 barrels per day capacity pipeline was closed down for 122 days between January 2016 and May 2018, media has learnt.

The NCTL and the Trans Niger Pipeline (TNP) are the two major pipelines used by oil companies operating in the eastern Niger Delta to evacuate crude oil to the Shell-operated Bonny Export Terminal.

Media source gathered that the NCTL is a major crude oil transportation channel that conveys crude oil injected from  Oil Mining Leases (OMLs) 29, 18, 24, 25, 23 and 55; running from Nembe Creek in Bayelsa State through Cawthorne Channel Field on OML 18 to the Bonny Oil Terminal for export.

The pipeline has a capacity of 150,000 barrels per day at Nembe Creek, but can evacuate 600,000 barrels of liquids from the  Cawthorne Channel end.

The 115 kilometre-capacity line was built by Shell Petroleum Development Company (SPDC) between 2006 and 2010 at a cost of about $1.1 billion but is currently being operated by Aiteo Group since 2015 when Shell completed the assignment of its interest in OML 29 and the NCTL to Aiteo Eastern E&P Co. Ltd.

The status report on the operations of the pipeline, which was obtained by THISDAY from one of the oil producing companies that evacuate crude oil through the facility, showed that due to recurrent thefts on the pipeline route, which are evidenced by significant pressure reductions on the trunk line, theft points identification as well as illegal refineries, Nigeria has experienced loss of production and huge revenue.

The report showed that between January 14, 2016 and May 23, 2018, the NCTL was out of operation for 122 days as a result of the activities of oil thieves that created several illegal bunkering points on the pipeline.

According to the report, in December 2016 alone, 45.46 per cent of the total net crude oilinjected into the NCTL was lost.

A breakdown of the operation of the pipeline showed that it was shut down for 53 days in 2016; 62 days in 2017 and seven days in 2018.

“Third party interference with the, line has oftentimes resulted in oil leaks, which ultimately culminate in shutting down the NCTL to undertake emergency repairs. This in itself has resulted in the NCTL being shut down for about 122 days and an approximate deferment of 50.386 million barrels of crude oil (net) for the six injectors into the NCTL since Aiteo took over the operatorship of the Trunk line. As at May 1, 2018, there were a total of 24 illegal bunkering points identified along the NCTL. Aiteo Eastern E&P successfully repaired nine of these illegal bunkering points,” the report said.

The report added that these illegal bunkering points also contribute to the huge losses on the volumes injected across the NCTL by the six oil mining leases and the volumes actually received at Bonny Terminal.

Media had reported that Aiteo paid the Joint Task Force in the Niger Delta a total of N1.192 billion for the protection of the pipeline over a period of three years.

A breakdown of the payment schedule showed that for 2015 alone, the company paid a total of N19.696 million to the JTF; N462.033 million in 2016; N449.419 million in 2017 and N260.663 million in 2018.

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