…As Petroleum Minister Again Shun Proceedings

ABUJA – The lingering controversy over a $3.8 billion Egina oil platform project between the Lagos Deep Offshore Logistics (LADOL) and Samsung/Total took a fresh twist on Tuesday march 11, 2014, following allegations by the plaintiff, LADOL, that the first defendant, Samsung Heavy Industries (SHI), had breached an earlier ruling by Justice Chukwu Jeku Aneke of the Federal High Court, Ikoyi, Lagos, that parties maintain status quo pending the determination of the suite.

Counsel to LADOL, Professor Fidelis Odita (QC, SAN), had told the court that despite the court order of January 24, 2014, Samsung, had on February 27th and 28th 2014, made presentations to the Nigerian National Petroleum Corporation (NNPC), of its plans to replace LADOL with another company as its third party local content partner for the project.

The contract awarded to Samsung Heavy Industry and LADOL by Total for the integration of a Floating Production Storage and Offloading (FPSO) platform otherwise known as Egina project to be cited at LADOL base in Lagos, assumed litigation following alleged schemes by Samsung to exclude the indigenous firm from the plum contract.

The development is coming even as the fourth defendant in the Suite, the Federal Ministry of Petroleum Recourses, again failed to make representation at the court’s proceedings. Others joined in the suite are, Total Upstream Nigeria Limited (Total), and the Nigerian Content Monitoring Board (NCDMB).

Justice Aneke who frowned at the alleged breach of his order for parties to maintain the status quo, was apparently not taken- in by the defense counsel, Wole Olanipekun (SAN), in his claim of ignorance of his client’s presentation to NNPC.

“If this allegation is found to be true, it is a very serious issue”, the Judge declared.

The Presiding Judge however adjourned hearing to April 16, 2014, following the ‘conditional appearance’ (appearance for the first time) of the Counsel to the third defendant, NCDMB, Chidi Ilogu (SAN), who pleaded for time to enable him prepare as well as file certain applications he intends to bring before the court.

Speaking with journalists after the hearing, Counsel to LADOL, Professor Fidelis Odita, said the case at hand was an attempt for the first time, to test the efficacy of the Nigerian Local Content Act 2010, as it relates to its enforcement in the nation’s Oil and Gas Industry.

“The contention of my client LADOL is that having been used by Samsung as the local content vehicle to win this major contract of $3.8 billion it is not open to Samsung to say that our client is no longer the local content partner.

“What is even more perplexing in a case like this is that the contract allocated the sum of $214 million dollars for the construction of facilities at LADOL. This 214 million dollars is part of what Samsung is trying to put in the pocket and sabotage the Nigerian economy by doing so, we say that the court should not allow them to do so.

“However, the Nigerian content monitoring board has just entered appearance yesterday and requires time to study the papers so as to respond to the proceedings which has been issued. In this circumstance, we felt constrained to allow the court to step down the matter to 16th of April this year to allow the NCDMB to take a position and also to enable the other defendant to file their own papers. So hopefully, this matter will come up for argument on the 16th of April but in the meantime the court has emphasized to Samsung that it is not open to it to take steps to replace LADOL as the local content agent before the resolution of this matter because it came to our knowledge that on the 27th and 28th of February this year, Samsung went to the NNPC to make presentation trying to present a third party as the local content party.

“What the Nigerian Content Monitoring Board set out to do in its frame work document is that where there is any major oil and gas project in Nigeria, that major oil and gas project should leave a legacy facility for the benefit of Nigerians and to create job for Nigerians. It is in that spirit that this Egina FPSO contract made the provision for 214 million for construction of the fabrication yard and integration of facility at LADOL.

“What Samsung is trying to do cynically is to put the money in its pocket by trying to look for another local content partner. If it took over two years to get this far with LADOL, how long will it take with the new partner? It is clear that the only solution which can deliver the project is the LADOL solution. If Samsung in violation of the status quo order, continue to make presentation to the NNPC, we will issue contempt proceedings against Samsung, NNPC and Against Total”, Odita declared.

Also commenting on the issue, a stakeholder in the industry who was present at the hearing, Mr. Zik Zulu Okafor, described the LADOL/ Samsung case as a test case for the local content in Nigeria. “It is also a test case for the critical issue of serious protection of National interest within the oil and gas industry. I am particularly happy that the Nigerian Content Development and Monitoring Board made appearance today because I think they need to see this as a very grave matter because the outcome of this case means a lot for Nigerian Content Law. If justice is done, then we can celebrate the efficacy of the act, if justice is not done I think it will be a fatal blow for the Nigerian Content Law”, he said.

Zulu further pointed out that the Nigerian economy had been at a great loss before the enactment of the law “Between 1956 and 2006 when the local content bill was initiated about 95 percent of the jobs in the oil and gas industry were done outside the shores of the Country and within that 50 (fifty) years, Nigeria lost over 280 billion dollars to foreign companies but since April 2010 when the Nigerian Content Law came alive, there has been a huge difference, Nigeria has been able to save over 200 billion dollars worth of jobs.

“The money is domicile in this country today instead of flying abroad. So we have been able to protect to very large extent capital flight. Secondly, hundreds and thousands of jobs have been saved. I am hoping that justice will be done because it means a lot to Nigerians”, he added.