Oil
NNPC in questionable Egina FPSO award to Samsung
HOUSTON- Samsung, the Korean Ship builder, engineering, procurement and construction giant appears to have been endorsed by the group executive committee, GEC, of the Nigerian National Petroleum Corporation, NNPC, for execution of the Egina Floating, Production, Storage and Offloading, FPSO, vessel in what appears to be questionable circumstances.
Egina oil field is a $15 billion project development being promoted by Total, the French oil giant in partnership with the NNPC, on behalf of the Nigerian government.
An international bids tender process for the Egina project, superintended by NAPIMS, the NNPC investment arm; the Department of Petroleum Resources, DPR; the Nigerian Content Development and Monitoring Board, NCDMB; and Total had seen the emergence of Hyundai Heavy Industries, HHI, to handle the FPSO packages valued between $3.5 billion – $4 billion.
NAPIMS had consequently forwarded the name of HHI as the preferred bidder for the FPSO packages to the NNPC for GEC consideration.
It was gathered that in a meeting which took place after a GEC meeting held a few days before Christmas, Mr. Andrew Yakubu, the NNPC group managing director, Abiye Membere, the NNPC group executive director and Mr. Tony Madichie, the NNPC secretary and legal adviser, decided to award Samsung the FPSO package.
Although we gathered that Samsung gave a 5 per cent discount on the bid advanced by HHI, the company did not participate in the initial bids tender exercise, neither was it recommended by the superintending authorities.
Repeated phone calls including a text message to Mr. Membere for clarification proved abortive. Similarly, phone calls to Mr. Yakubu to obtain clarification were not answered.
While the development runs against the grain of due process, checks revealed that, Samsung has never executed any project in Nigeria neither does it have any presence in the country.
Further checks revealed that the Egina project has a 51 months execution timeline, and it will take anywhere between 4 and 5 years for Samsung to construct a facility in Nigeria to execute the Egina FPSO package.
Although officials of Total refused to be quoted, those who spoke on condition of anonymity referred us to a letter the company had written to the NNPC insisting on sticking to due process.
“The NNPC management must either stick to due process or forget about this project. Already, the way and manner they have gone about this, exposes all those involved to investigation by the government of the UK under the anti-bribery law and the US Security and Exchange Commission, SEC, over possible contravention of the Foreign Corrupt Practices Act, FCPA,” the lady noted.
“It is now obvious that the so called effort to save Nigeria money has been a ruse all along to smuggle in Samsung to handle the FPSO package. If indeed, the NNPC management had altruistic motive, why didn’t they ask HHI to reduce their bid by 5 per cent?
This is a very strange approach to doing business; we have never witnessed anything like this before, and we are afraid that the fallout could have very negative consequences for the image of the corporation and the government.”
Shortly after Mr. Abiye Membere, was appointed group executive director in charge of exploration and production, and his predecessor, Mr. Andrew Yakubu was elevated to the position of Group Managing Director, management of the corporation, they decided that all the projects which had been sent for GEC consideration were too pricey.
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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