On 13 July, the Federal Executive Council, chaired by President Bola Tinubu, approved a contract to procure advanced solution technology in the Nigeri
On 13 July, the Federal Executive Council, chaired by President Bola Tinubu, approved a contract to procure advanced solution technology in the Nigerian oil and gas sector.
The Minister of State for Petroleum, Heineken Lokpobiri while announcing the deal said it will enable the country to track every cargo of crude oil loaded in Nigeria up to its destination.
The contract was awarded to P-Lyne Energy Limited and is expected to be completed in 180 days.
However, the contract approved by the Tinubu administration duplicates an already-awarded contract.
In March 2023, the administration of Former President Muhammadu Buhari engaged Antaser Nigeria Limited to implement a Cargo Tracking System for 15 years.
The Nigerian Shippers’ Council (NSC) signed the agreement with Antaser Limited and four other companies on a “No Cure, No Pay Basis” and with a revenue sharing ratio of 60:40 accruable to the Federal Government of Nigeria and the Consortium, respectively.
The existing contract is a PPP arrangement with no cost to the federal government.
The Tinubu administration has now awarded a duplication of that contract.
The previous government said the aim of giving the existing contract to Antaser Nigeria Limited was to correlate the real flow with declared quantities and correct the problem by introducing electromagnetic flow metres with remote data acquisition.
Using these flow metres, the Antaser team will receive data in real-time and make the exact loaded tanker volumes available to the relevant authorities.
This information would then be correlated with the declared volumes or verification. Any discrepancies would make issuing the eCTN certificates impossible.
To deliver this promise, Antaser Nigeria Limited said in the agreement that it was committed to “procuring and installing” the necessary on and offshore flow metres in all of the country’s exporting points.
The data from these flow metres would be collected to Antaser core using technology.
Records show that the federal government lost huge amounts of money annually due to under-declaration, wrong classification, concealment, and under or over-invoicing.
In addition, it is estimated that $532 million would have been generated had eCTN been implemented between 2015 and 2021.
The project, signed in 2023, is expected to generate $2.3 billion over ten years, with the Nigerian government directly receiving N1.2 billion on a 60:40 revenue-sharing ratio for the Federal Government of Nigeria and Antaser Nigeria Limited.
To achieve this revenue generation, Antaser Nigeria Limited said it would make a substantial initial investment within the country, to set up the local project infrastructure, export and oil infrastructure installations, which is conservatively estimated to cost $52 million, from its own funds over a period of one year.
“The total costs for running the operations over the initial 10 years, including our global network, maintenance and upgrades of IT infrastructure, licenses, equipment recalibration etc, is estimated to be $1 billion, with an annual average cost of operations at $109 million,” the contract proposal shows.
The National Information Technology and Development Agency (NITDA) issued a certificate of clearance on 25 January 2023 before the contract approval was given to Antaser Nigeria Limited.
The cost of electronic crude flow meters, installed in all Nigerian offloading bays, for providing live crude offloading volumes was put at N27 billion.
According to the agreement, the terminals that would have electromagnetic flow metres connected to the Antaser systems are 15 Nigeria Crude Oil Terminals (FPSO PLATFORMS), 6 FSO Platforms and 5 Crude Oil Terminals (Land Platforms).
The NITDA certificate was issued on the condition that the project will be financed by Antaser financial institutional partners during the duration of the operations and that the financing partners are Nigerian banks with a track record of good financial performance.
“And that based on a simulation ducted by the consultant, given the projected parameters agreed with stakeholders, recovering the investment requires 13 – 15 years to operate and an additional 5 – 10 years of operations to mark a profit at international standards. Resulting in 25 years of estimated concession,” the contract agreement said.
It remains unclear why the Tinubu administration awarded a duplicate of this contract to P-Lyne Energy Limited.
An official of Antaser Nigeria Limited revealed that to the best of his knowledge, the contract awarded to his company has not been cancelled. He said his company would write to President Tinubu and heads of relevant MDAs to complain about the duplication of the contract.
