President Goodluck Jonathan has expressed deep concern over environmental pollution in the Niger Delta owing to oil exploration and asked Shell Petroleum Development Company (SPDC) to urgently take measures to ensure integrity of pipelines.
This is as the Minister of Petroleum Resources also took SPDC to task and expressed grave concerns over the short supply of gas to power plants and domestic use across the country which has led to low generation and threatens the projected date of uninterrupted power supply in the country.
President Jonathan spoke yesterday, when a delegation of Shell Executives led by outgoing Executive Director, Upstream International, Mr. Malcom Brinded, to pay him a farewell visit at the Presidential Villa, Abuja where he charged Andy Brown who is replacing Brinded to have more programmes to check oil spills.
The President also charged them to invest in building critical infrastructure in the country especially in the area of power supply which was needed for the quantum leap in production and industrialisation.
Equally, the President challenged Shell Petroleum to actively participate in the Federal Government’s efforts at infrastructural development, especially power supply, stating, ”
“Shell is the leading oil company in Nigeria, and we expect you to join our effort to build more power plants, so that the economy can grow, and provide more jobs for our youth.”
He said the Federal Government through the amnesty programme had removed most impediments to smooth operations but pointed out that the youths mopped from the creeks and away from militancy need jobs to engage them which he expects Shell to assist in creating an environment that will create employment.
On the implementation of the Local Content Law, Jonathan observed that it was achieving the aim of local utilisation of products and manpower but pointed out that there were rooms for improvement.
Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who responded to question from State House Correspondents on the meeting, said government was concerned over the supply of gas by Shell and however hinted that government had extracted a commitment for an improved supply to the power plants and local consumption.
“Some of our concerns which we have expressed very concisely to them and to Mr President lie in the area of domestic gas and their integrity on the gas plant particularly at Utorogu and Ughelli. Domestic gas supply has been slippery over the past few months and that call for a major concern because of the NIPP and the power plants that we must provide sustainable and adequate volume of gas if we must move forward in the manner in which government want to move forward in terms of power supply.
“We have expressed our very stringent concerns in this regard. We are also concern at balancing domestic gas output in some respect in the export gas in all output,” she disclosed.
She further stated that with the conclusion of the power retreat where most of the issues were discussed and ways out outlined, implementation was expected in the next 24 to 36 hours when results would be gotten, especially in bridging gas supply along the western axis.
“This is a major concern for us and we are taking it very seriously and we are exploring all possible options to ensure that we meet the necessary gas supply and we keep it sustainable going forward,” she added.
Asked to do an evaluation of the performance of the multinational oil company which is the operator of the Joint Venture partnership of the federal government in the oil sector, Alison-Madueke commended Shell for performing well in the dealings with Nigerian in the past 70 years.
“We have not taken it lightly at all. I do not think there is any multi-national at all that has not felt the heat that we have placed on them over the last 13 months we shall continue to do so. We work as partners but these are critical national assets and they are critical for the Development of our economy going forward and we are not taking it lightly at all,” she said.
In his response, Brindel said oil spills were mostly due to sabotage and not due to legal exploration activities but did not say if they apply the same global standards adopted in developed economies in the country.
He explained that Shell has not been investing in refineries and infact have been divesting from them because they are no more viable, adding that all across the globe, one has to look very well before venturing into building refineries as most were running at losses.
“With respects to downstream, two comments there, Shell is divesting refineries all over the world because there is a surplus of refineries, we no longer own any refineries even in the United Kingdom. I will also say because of the surplus of refineries available in a way, one has to look very closely whether building new refineries is a good investment for anyone not just for Shell but for countries involved. In today’s world not looking at the past but where we are today, there is surplus of refinery capacity which essentially means many refineries in the world run at a loss. Which also means one can get refine products back again and pay very little for it to be refined.
“I do believe that investment in the downstream sector especially gas sector in Nigeria as I touched on is very important, Nigeria has huge resources of gas that is yet to be unlocked and the potential to add to that gas not only in power but in other ways in the country. I think there are a lot of opportunities for Nigeria and for Shell in Nigeria and the potential much more than to consider refining,” he said.
He pointed at the building of Afam Power Plant which he said started within his tenure and was producing now and assured that they will invest more in the gas sector for export where the market demand presently lies.
On why its Social Responsibility and community development programmes said to be less than par and leading to altercations between them and host communities, he replied that they have come a long way which led to the fashioning of the Global Memorandum, of understanding (GMOU) which he said has addressed that.
He listed their investments in the country as the deep offshore projects like Bonga, expansion of the Liquefied Natural Gas (LNG) Afam power plant and the Baron UBA project while on their host communities; he said they were offering employments and educational opportunities to create capacity
The delegation included Brinded, Brown the in-coming chairman, the company’s Managing Director, Mutiu Summonu and Ian Craig.