The $3.8 billion Egina Oil platform project has become a matter of litigation as the Lagos Deep Offshore Logistics (LADOL) has instituted legal action against Samsung Heavy Industry and its allies alleging a breach of local content. The action is coming on the heels of alleged plots to deny Lagos Deep Offshore Logistics (LADOL) a pie of the juicy $3.8 billion Egina Oil platform project which it jointly won late last year.
According to a court summons sighted by Vanguard, Total Upstream Nigeria Limited (Total), Nigerian Content Monitoring Board (NCDMB), and the Minister of Petroleum Resources are joined as co-defendants. The suit was instituted at the Federal High Court before Justice Aneke. The $3.8 billion facility located 130 kilometers offshore was conceived by Total Upstream Nigeria Limited in collaboration with the Nigeria National Petroleum Corporation (NNPC) is expected to take off by the end of 2017.
But a letter to the Presidency on 18th October last year drew the President attention to the fact that the Maritime workers Union had on the 6th of June 2013 protested against the construction of the proposed floating, production, storage and offloading FPSO in LADOL facilities in Lagos. In response to the protest letter, the NPA Vanguard learnt drew the attention of the Ministry of Transport to a more serious concern on the safety of sitting the project at LADOL facilities. The NPA observed that it would not be technically and operationally possible to install a floating, production, storage and offloading FPSO facility at the proposed location based on global best practice among other reasons.
The Egina platform when operational will be the first of its kind in Africa with a projected production capacity of 200,000 barrels per day (b/d) and a storage capacity of 2.3 million barrels.
Findings revealed that aside from the potential consequences of Nigeria losing a colossal $200 million dollars earmarked to promote the local content aspect of the project, an expected creation of over 50,000 jobs would also be jeopardized, due to the contract infringement.
In the proceedings which were instituted on behalf of LADOL by Professor Fidelis Oditah QC, SAN, LADOL is seeking 19 relief against Samsung and other defendants, asking the court to make a declaration that a contract awarded by Total to Samsung on or about 15 March 2013 for the construction and installation of a floating production storage and offloading unit (FPSO) at Total’s Egina oilfield in oil mining lease (OML) No 130 in deep offshore Nigeria (the “Egina FPSO Project”) is subject to the Nigerian Oil and Gas Industry Content Development Act 2010.
Other relief being sought by the company includes a “declaration that the Egina FPSO Project contract was awarded by Total to Samsung, with the approval of the Nigerian regulatory authorities including NNPC, NAPIMS, NCDMB and the Ministry of Petroleum, on the basis inter alia that a significant proportion of the steel fabrication and the integration of the FPSO topsides would be carried out at LADOL’s yard in the LADOL Free Zone, Tarkwa Bay, Lagos.
“A declaration that the Egina FPSO Project contract was also awarded by Total to Samsung on the basis inter alia of Samsung’s representations and assurances to the Nigerian regulatory authorities that Samsung would build and operate training Facility in the LADOL Free Zone for the training and education of Nigerians.
“A declaration that the Egina FPSO Project contract was bided for and obtained by Samsung on the basis of a joint venture and/or arrangement between Samsung and LADOL for the development, construction and operation of an offshore fabrication yard and FPSO integration facilities in the LADOL Free Zone for the purposes, amongst others, of the Egina FPSO Project (Joint Arrangement).
“A declaration that having bided for and represented to the Nigerian regulators that LADOL was its local content partner and on the basis of the Joint Arrangement, obtained the award of the Egina FPSO Project contract, it is not open to Total and Samsung unilaterally to exclude LADOL from the execution of the said contract”.
LADOL, said to be the only wholly Nigerian indigenous oil and gas service provider is further seeking a declaration that the purported exclusion of the company from the execution/performance of the Egina FPSO Project contract by Total and Samsung is a violation of the Act and consequently is of no effect whatsoever.
Also being sought are, “an order, pursuant to section 68 of the Act, cancelling the Egina FPSO Project contract, on the basis that the purported exclusion of LADOL from the performance/execution of the Egina FPSO Project contract and Samsung’s failure to build a training school in Nigeria (as it had promised it would) are a violation of the Nigerian National Content law”.
The company further wants a disqualification of Samsung from bidding for or participating in any capacity whatsoever in any projects, operations, contracts or subcontracts in the Nigerian oil and gas sector. While appealing to the court to restrain the defendants from excluding it from the execution of the Egina FPSO Project contract, the company further wants the Nigerian authorities similarly restrained from approving any other person as the Nigerian local content partner or local content solution of Samsung in respect of the work scope (fabrication of steel structures and integration of the FPSO topsides) allocated to it in respect of the Egina FPSO Project.
