OMS clears air on crude oil transportation contract

PPP Fluid Mechanics Ltd, a company that was later acquired by Ocean Marine Security Limited through share purchase agreement, has said that it secured the contract for the transportation of crude oil by marine vessels from Escravos Terminal to Warri Refinery through an open international competitive bidding in which 13 other companies participated.

In a press statement made available to journalists, the OMS debunked the claim that the contract was awarded without due process as speculated on the social media.

The statement reads that, "OMS, an offshore assets protection company, promoted by corporate titans, Tunde Ayeni and Hosa Okunbo, had come under media searchlight in respect of the crude oil transportation by marine vessels contract which it executed for the Nigerian National Petroleum Corporation, NNPC, in recent past, with two online publications grossly misrepresenting the terms of the contract".

"For instance, while the reports claimed that the contract was awarded at the cost of $15.4 per barrel, the company disclosed that the contract cost never exceeded $5.68 per barrel while it lasted, and that was inclusive of provision of dedicated security posts in addition to the transportation of crude oil to the refineries".
  “If only the journalists who did these stories had been a bit more painstaking and crosschecked their facts with NNPC, they would not have come up with this inaccurate and false report.”

The statement further noted that OMS delivered a total of 65, 597, 698 barrels of crude oil to refineries between 2011 and 2015, the exact figure that was made available at the drilling terminals.

“Such media claim that OMS delivered less than what it received from drilling terminals is an embarrassing demonstration of ignorance by the section of the media that came up with the report. NNPC has its records of what each vessel loaded and discharged. In any case, if that was true, wouldn’t the present government have summoned the company to come and account for the alleged shortage?”

It added that contrary to the claim in the reports that crude oil transportation through pipeline was deliberately circumvented to yield way to transportation by marine vessels, the facts on ground indicated that if NNPC did not resort to the vessel option at the time, the refineries would have shut down completely owing to non-supply of crude oil.

"Before NNPC embarked on the marine vessels option of transporting crude oil, a report commissioned by the corporation indicated that it was no longer economical to transport crude oil from Escravos to Warri Refinery through the pipeline as a result of unsustainable expenditure of about $121million for the maintenance and repairs of the Escravos-Warri broken crude oil pipeline. Even at that, this huge expenditure became a regular one which still did not solve the problems associated with transporting crude oil to the refineries through pipelines".

"The report further indicated an estimated 40-60 percent loss of crude oil pumped through the Escravos-Warri pipelines owing to ceaseless pipeline vandalisation and oil theft".
It claimed that before the engagement of PPPFM, the Warri and Kaduna refineries had been shut down for about 48 months owing to non-supply of crude oil feedstock to keep the refineries running.

OMS said: “It is important to state that with our company’s intervention, it is estimated that the nation has been saved over $2billion based on NNPC’s admittance of an average loss of about 40-60 percent of crude oil pumped through the Escravos-Warri pipeline due to vandalisation and crude oil theft.

This saving is definitely more if the analysis were to be based on the additional loss recorded while pumping crude oil through the Port-Harcourt-Bonny-Okrika pipeline.”