House of Reps summons Petroleum minister, NNPC MD, others over looming crises in Oil sector

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The House of Representatives Joint committees on Petroleum (Upstream and Downstream) and Gas Resources yesterday summoned the petroleum minister, Mrs Diezeani Alison-Madueke, over the looming crisis in the sector.

Others summoned are the group managing director of the NNPC, Dr Joseph Thlama Dawha, and the leadership of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). The Nigerian Union of Petroleum and Natural Gas workers (NUPENG) was also invited.

A statement jointly signed by the chairmen, Petroleum (Upstream), Mr Muraina Ajibola; Petroleum (Downstream), Dakuku Peterside; and Gas Resources, Mr Bassey Ewa, said that the summons was due to the looming crisis in the oil and gas sector in the country.

It stated that the committees would not allow any strike to cripple the nation’s oil and gas sector.

“The Joint Oil and Gas Committee of the House of Representatives is concerned by the strike as reported in the media by staff of the Nigerian National Petroleum Corporation (NNPC).

“Our concern is driven by the major role oil and gas play in our economy and the enormous damage any disruption in the system will entail for the Nigerian people.

“Alive to our constitutional responsibilities, the joint house committees have decided to intervene in this matter with a view to resolving whatever the issues may be.

“Accordingly, we have invited the minister of petroleum resources, the affected unions and relevant stakeholders in the sector to a meeting for Thursday, September 18, 2014, at 11:00 a.m. at the House of Representatives.

“Given the urgency of this matter, it is our hope that the relevant parties will attend this meeting. We enjoin the parties to work with us to resolve their differences in the overall interest of the nation.”

Meanwhile, the daily petroleum products distribution nationwide dipped by 36 million litres from the 40 million litres daily average, following the indefinite strike embarked on by petroleum industry unions, PENGASSAN and NUPENG, on Tuesday.

They said they embarked on the strike following unresolved pensions issues between them and the NNPC.

The pension issues were compounded by the revocation of the licence of the NNPC pension scheme because of alleged inability of the corporation to bridge the N85 billion gap in their pension scheme.

The unions said yesterday that it would worsen if the pension issues remained unresolved as the corporation imports 45 per cent of the 40 million litres of daily consumed petroleum products.

The labour dispute between government and the oil industry workers is already taking a toll on Nigeria’s oil export.

According to a report monitored by LEADERSHIP, the Nigerian government, obviously aware of the consequences the strike would have on its gas supply contract with Ghana, has informed the country that it would not be able to maintain supply of the product.

Following this stoppage, individuals and businesses in Ghana are beginning to brace up for more power outages in the coming days, following the decision of the Nigerian authorities to stop gas supplies to Ghana.

The decision, which took effect from Tuesday followed the labour unrest.

“The Nigerian authorities communicated this bad news to us this afternoon. We are working out emergency measures to forestall adverse effects on individuals and industry,” a highly placed source at the Ministry of Energy and Petroleum told the Daily Graphic in Accra on Tuesday.

“What the stoppage of gas flow to Ghana means is that the Asogli Power Plant will shut down because it runs only on gas,” the source said.

The Asogli Power Plant was augmenting Ghana’s energy needs with an average of 180 megawatts (MW).

“This is certainly not good because other power plants are operating below capacity due to maintenance schedules, delay in crude oil supply and other factors,” the source said.

Ghanaians, local and foreign businesses have been grappling with problems associated with the intermittent supply of electricity for several months.

The water level in the Akosombo Dam keeps dropping while power plants in the country continuously operate below capacity.

The suspension of gas supply from the West African Gas Pipeline will aggravate an already precarious power situation.

Despite the challenges, the source gave an assurance that work was on schedule to tie the Atuabo Gas Plant to the Floating Production Storage and Offloading (FPSO) vessel, which is being operated by Tullow Oil plc.

Thermal plants in the country are also expected to be powered by the gas which will flow from the Atuabo Gas Plant.

Additionally, two power barges expected to generate a total of 450 MW are being built in Turkey and are expected to be shipped to Ghana before the end of the second quarter of 2015.

Meanwhile, the first power barge, which has a capacity of 225 MW, has been constructed.

There was an eight-month break in gas supplies from Nigeria to Ghana after a vessel broke one of the gas pipelines in Togo in August 2012.

Ghana’s demand for electricity is between 1,800 and 2,000 MW, but it is targeting 5,000 MW by 2016.

It wants to have enough to export to other West African countries by the end of 2016.

The major and independent petroleum products marketers import 55 per cent of the products consumed nationwide.

At the NNPC Ejigbo, Lagos, and Mosimi, Ogun depots, NAN reports that more than 1,000 trucks in both depots queued outside, apparently trapped by ongoing strike.

Alhaji Dele Tajudeen, chairman, Mosimi depot of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said the strike which had lasted for two days had impacted negatively on the marketers.

Tajudeen advised NNPC and the unions to expedite action on the pension and other outstanding issues before the strike derails the nation’s economy.

According to him, the shutdown of all NNPC operations would grossly affect the socio-economic growth of the nation.

“I urge the federal government and the unions to come to terms in finding lasting solution to the lingering crisis. Most trucks had been here since Saturday night to load products to various states but it was unfortunate that they found themselves in this kind of mess,’’ he said.

Another marketer at Ejigbo depot, who pleaded anonymity, said that the strike had crippled NNPC operations and the economy of most Nigerians in the area.

He said the ongoing strike had forced major marketers to load products at private depot at higher prices.

According to him, marketers load petrol at between N90 and N91 per litre as against the official price of N89.70k per litre.

The president, Nigerian Association of Liquefied Petroleum Gas (NALPGAM), Mr Basil Ogbuanu, said the strike had affected loading of gas in some of the depots across the country.

Ogbuanu said the shutdown of Warri depot which has the highest concentration of his members would create scarcity of the product nationwide.

Meanwhile, the PENGASSAN media officer, Mr Babatunde Oke, in a statement yesterday, said the strike would continue until the union extracted concrete commitment from the NNPC on the issues at stake.

It said that the demands of the workers were adequate, adding that they were also demanding regular funding of the closed pension system, and immediate steps to carry out turnaround maintenance (TAM) on the four refineries as agreed between government and the two unions.

The statement said the demands also included the restoration of crude supply to the refineries.

It said the issues had gone beyond granting of a one year grace to the NNPC by PENCOM.

The statement said the NNPC management should put in place a machinery that would automatically fund the pension system without any bureaucratic bottleneck, noting that the funding had been delayed due to the inability of the board of the NNPC to meet for over a year to approve the proposal of the management for funding of the pension system.

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