Emmanuel Addeh in Yenagoa
The management of AITEO Aiteo Eastern Exploration and Production Company, an indigenous oil concern, yesterday decried the incessant loss of revenue and frequent downtime totalling over two months in 2019 alone.
Group Managing Director of the company, Victor Okoronkwo, who spoke during a presentation at the ongoing Practical Nigerian Content Forum (PNC) in Yenagoa, lamented that the company had also lost four million barrels of crude oil to theft in the last 11 months.
Okoronkwo emphasised that despite the frequent arrest of suspects who routinely disrupt the operations of the company, it was disheartening that they are never prosecuted by the appropriate authorities.
“One of the biggest challenges we face in our operations is the security of our pipelines and oil facilities. Our pipelines and flowlines are constantly vandalised by unscrupulous elements tagged ‘crude oil thieves’ attempting to cause economic sabotage to our company and the people of this great country.
“Despite our efforts in raising NCTL uptime from 60 per cent to over 80 per cent since acquisition, we have recorded more shutdown days in operations due to third party infractions for over 2 months this year compared to previous years. This has resulted in loss of revenue and deferments estimated at about four million barrels so far this year.”
Okoronkwo lamented that even when the lines are allowed to work, crude oil loss of up to a third of the entire content is recorded, disclosing that other oil companies hooked on to the same line are forced to shut down each time there is a disruption.
“Also worrying is the amount of crude loss recorded even when the pipeline is operational, usually in the range of 25 to 35%. More worrying is that even when the perpetrators of these acts are caught and handed over to security agencies, we are yet to witness any convictions.
“Remember, Aiteo operates the NCTL which also serves 4 other Oil companies (Eroton, Newcross, Belema Oil and Shell) injecting into the pipeline, hence, when there are infractions on the line, these companies are also forced to shut-down; resulting in economic losses for these companies also and the Federal Government by and large”.
But he noted that in spite of the setbacks, the company had continued to meet its obligations to its stakeholders.
“Despite all these challenges, we have kept our commitment to NCDMB paying up to N1.52 billion in NCDMB fees and N1.5 billion as NDDC levies. In addition, Aiteo has spent over N3.6 billion in community support programs and projects; offered jobs to thousands of Nigerians and intentionally leading inclusive participation of indigenous contractors in its business operations.
He said the Nembe Creek Trunk Line is a 117km pipeline, stretching from Bayelsa state to Bonny in Rivers state, with 600,000 barrels per day design capacity, adding that Aiteo represents a testimony of what local content, underpinned by dogged entrepreneurship can achieve.
He explained that the increasing oil price volatility was adding complexity to a fast-changing energy sector where digital technologies and the drive for greener energy and demand are putting shareholder returns at risk, while creating major re-evaluation of future commodity prices and energy value chains.
To stay relevant and retain their licence to operate, he urged oil companies to reinvent their purpose and compete more effectively in the emerging energy economy.
“Companies must learn to focus on the essence of their business, re-think their operating models, embrace new technologies and adopt new workforce strategies as they strive to become more agile and adaptable, connected and collaborative in the energy revolution.
“Embracing next generation digital technologies, especially Artificial Intelligence (AI), which, according to an Accenture 2019 Report indicates that 42% of upstream executives expect AI to have the greatest short-term impact on their businesses.
“Nigerian oil companies must also begin to start building the workforce of the future, seeking to attract and equip a modern workforce as well as enhance labour proficiency and optimize productivity, using data and digital capabilities.
“ I am convinced that we will come up with holistic resolutions during this workshop that will help position the industry on the right trajectory for long-term sustained and inclusive growth in the future disruptive landscape,” he noted.