The management of the Nigerian National Petroleum Corporation (NNPC) said it was compelled to award the surveillance contract of the strategic 87-kilometre Trans Forcados Pipeline (TFP) to a new contractor because the country has lost $800 million revenue in 2018 due to incessant breaches on the pipeline.
A statement issued by the Corporation's spokesperson, Ndu Ughamadu, explained that the decision to assign the TFP surveillance package to a new operator, Ocean Marine Solutions was reached after consideration of huge losses on TFP and rigorous appraisal of the company's impressive record of performance on the Bonny-Port Harcourt and Warri-Escravos crude evacuation lines.
According to him, the new contract requires the contractor to pay for any damage to any inch of pipeline under its watch, stressing that the new deal offers immeasurable benefits to the NNPC, its joint venture partners, the host communities and the entire federation.
The statement explained that NNPC was faced with massive losses in projected revenue, adding that stakeholders in the TFP which today account for daily production throughput of over 250, 000 barrels of crude oil were unanimous in the decision to seek better ways of ensuring reliability and availability of the line.
The NNPC stated that no responsible business entity or government would allow this level of hemorrhage to subsist without acting swiftly to protect the enterprise from further bleeding.
The Corporation said based on the above scenario, Ocean Marine Solution was assigned to handle the TFP under the proof of concept arrangement which is yielding great results in the Bonny-Port Harcourt and Escravos-Warri crude evacuation lines.
Under this package, the surveillance company is obligated to protect the lines and bear the cost of repairs if and when there was any breach to the pipeline.
This arrangement is totally different from the old order where the contractor gets paid for surveillance duties and totally exempted from repair cost or any form of responsibility in the event of any line break or breach to the pipeline he is paid to watch.
On the alleged huge cost of the new contract, the Corporation explained that the cost of the new deal pales into insignificance when placed side by side and value-for-money with the old arrangement.