• Thursday, June 20, 2024
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TotalEnergies eyes logistics contract award in Nigerian assets

Total takes $6.5 billion impairment, cuts costs

French supermajor TotalEnergies is getting ready to award a key logistics contract in two Nigerian assets such as Oil Mining Lease (OML) 102 and onshore acreage in OML 58 that could run for up to five years.

Data sourced from Nigerian Petroleum Exchange (Nipex), an electronic centre that provides details about procurement in Nigeria’s oil and gas industry showed Total Energies has invited interest for a tender opportunity for “Provision of Logistics Base Services” commencing 2022.

The scope of the work showed the worksite shall be an integrated base either within an Oil & Gas Free Zone Area (OGFZA) or offer a bonded warehouse in an area offering an all-inclusive and exclusive service and shall function mainly to receive, to store, record and dispatch “COMPANY’S equipment and materials”.

“Location shall be less than four hours’ drive by truck from our OML58 site and less than one hour drive by truck from the quayside. Quayside shall be less than 12 hours sailing time at an average of ten (10) knts from our OML102 site,” tender document by Total Energies said.

The OML 58 is located onshore in Rivers States, approximately 85 kilometers North West of Port Harcourt with projects designed to improve oil recovery, boost gas supply for industrial and domestic use while OML 102 is a shallow water block within the NNPC/Total Joint Venture (JV).

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“The expected duration of the contracts is; three (3) years term with an option of two (2) years extension,” Nipex’s tender document.

TotalEnergies noted that the successful contractor will be responsible of its own logistics organization and management of all the facilities, personnel and equipment which are required to perform the services and shall be fully operated by contractor.

Despite these developments, experts say Nigeria is punching below its weight in terms of attracting the right kind of investments in its energy sector as foreign investments now accounts for just a fraction of Africa’s biggest economy, with policy uncertainties and security issues also weighing on the mind of overseas investors.

“The significant drop in investment by these IOCs in Nigeria goes beyond capital discipline alone,” Simon Anderson, director performance improvement sub- Saharan Africa at Wood Mackenzie said in a note.

It added, “some Nigeria assets may be under-invested, resulting in potential upside opportunities”.

Nigeria has the capacity to pump around 2.2 million bpd of crude and condensate but in recent months, its output has been languishing below 1.55 million bpd. The country only pumped 1.23 million bpd of crude and 300,000 bpd of condensate last month, according to its Platts Analytics.

According to official documents, the Nigerian government is expecting the country to produce 1.88 million barrels per day of crude oil in 2022 and will use a benchmark oil price of $57 per barrel for its budget planning.