NNPC Signs Shareholder Agreement With Akwa Ibom, Firm For Development Of Integrated Logistics Hub

….Project To Support NNPC’s Attainment Of National Energy Security

The Nigerian National Petroleum Company Ltd has signed a Shareholder Agreement with the government of Akwa Ibom State and Solutions Hub Ltd to develop an integrated logistics hub that can service the Nigerian Upstream Industry and the entire Gulf of Guinea.

The partnership which was sealed on Friday in Akwa Ibom State, is in line with strategies being taken by the NNPC management to reposition the National Oil Company to operate commercially and deliver greater value for Nigerians.

Speaking at the event, the Chairman, Board of Directors, NNPC Limited, Senator Margery Chuba Okadigbo said that as a National Oil Company transiting to a full-scale Energy company, the NNPC’s commitment to the Ibom Solution Hub signals to potential investors and business partners that NNPC Limited means business.

She said in the event which was attended by the Governor of Akwa Ibom State, Udom Emmanuel that over the years, the Nigerian Upstream Oil and Gas industry has been labelled as one of the most expensive to do business with globally.

Consequently, the NNPC Chairman said this has impacted the profitability of investments and the ability of the Government and Host Communities to benefit from the value created from oil and gas exploration and production.

Specifically, Okadigbo said human relations, logistics, and direct handling costs represent almost 70 per cent of the total operating expenditure for the industry, with logistics costs contributing the most after human relations.

According to her, a further breakdown of the logistics costs shows that Marine Logistics account for the most significant component contributing about 44 per cent of costs.

With only two major centres in Nigeria that provide a shore base for logistics and other services for the oil and gas industry, LADOL in Lagos and INTELS in Onne, Port Harcourt, respectively, she stated that some of these costs could be attributed to a shortage of appropriate facilities where these services are required.

In recognition of these challenges, she told the gathering that the Nigerian Government, under the leadership of President Muhammadu Buhari and the Minister of State for Petroleum Resources, directed NNPC Ltd to work with all relevant agencies to democratize and increase the number of shore base locations equipped appropriately for effective and efficient service delivery at a competitive cost.

She said, “The proposed Ibaka industrial complex is one of such efforts by NNPC Ltd, in partnership with the Akwa Ibom State Government and foreign Investors, to develop an integrated logistics hub that can service the Nigerian Upstream Industry and the entire Gulf of Guinea.

“This facility is entirely intended to be funded by private funds and would help deliver benefits such as Employment creation, competitive logistics rates, increased offshore accessibility and services, infrastructural development, and business creation.

“Indeed, the investment in the Ibom Solutions Hub at Ibaka, designed as a full-onshore service and offshore access base, is timely and strategic.

“It is my immense privilege and honour to, on behalf of the Board of Directors and the Management of NNPC Ltd, confirm that all relevant governance checks have been adhered to for NNPC Ltd to be a party to the Shareholders’ Agreement.”

She expressed appreciation to the President for his strong leadership and speedy approvals, as well as to the Government and people of Akwa Ibom for their invaluable support and hospitality, without which the project would not have commenced.

“This is a glimpse of the new NNPC, and I would like to use this platform once again to invite other potential investors, foreign and local, to take advantage of NNPC Ltd’s renewed investment appetite to secure their right to play in Africa’s largest market by partnering with its largest energy company – NNPC Limited,” she added.

The Group Chief Executive Officer of the NNPC Ltd, Mallam Mele Kyari, described the event as a very important one in the history of the NNPC.

Represented by Mr. Adokiye Tombomieye Executive Vice President, Upstream, NNPC Ltd, Kyari said the day will be remembered as the day that NNPC Ltd collaborated with Akwa ibom State Government and it’s partners in walking the talk by emplacing an actionable and bankable private sector-led offshore location base.

The project, he stated, will transform the logistics infrastructure landscape of the nation and serve as “a game changer for not just the oil and gas industry but for the economy of our dear nation.”

He said, “NNPC Ltd is committed to work with Akwa Ibom State Government and the Solution Hub to expeditiously deploy all resources necessary to make this project a reality.

“Today is an important milestone, but it is important to note that the journey has just begun on this important project. |, therefore, implore all stakeholders to closely collaborate with us in making this a reality.

“On behalf of NNPC Ltd, we convey our profound appreciation to your Excellency for your strong leadership, the Chairman and Board members of NNPC Ltd, all agencies of Government and our partner AkiCorp, a fully owned company of the Akwa Ibom State Government for their unwavering support in bringing to life this project that will significantly redefine our economies.”

Ibom Solution Hub is a full-service onshore base for marine construction support.

It is being proposed to be located on a 40sq kilometers site on the Ibaka – Calabar River
Waterway to the sea confluence in Nigeria.

It is already designated a free trade zone by NEPZA and owned by Akwa Ibom State Government
Land to be acquired for 99 years lease by Ibom Solution Hub Limited.

It is modeled to be an alternative to existing logistics bases
and designed to offer the offshore construction support to West and Central
African regions

Based on the shareholder agreement, the NNPC is to have 30 per cent of the ownership, Akwa Ibom 20 per cent while Ibom Solutions Hub has 50 per cent.

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