Connect with us

Oil

Court suit may delay $15bn Egina Deepwater project

Published

on

LAGOS – Lagos Deep Offshore Logistics (LADOL) an indigenous oil servicing company has obtained an order from a Federal High Court in Lagos, restraining Samsung Heavy Industries and others from excluding it ( LADOL) from the execution of the FPSO project.

Industry watchers say court proceedings typically take time and that delays usually result in a scaling up of project costs.

The project in question is the floating production storage and offloading unit (FPSO) meant for Total’s $15 billion Egina deepwater development, offshore Nigeria.

The cost of the FPSO project is $3.8 billion.

In the suit, LADOL is claiming that a significant proportion of the steel fabrication and the integration of the FPSO topsides were meant to be carried out at its yard in the LADOL Free Zone, Tarkwa Bay, Lagos.

Samsung Heavy Industry and Lagos Deep Offshore Logistics had jointly won the contract to build a $3.8 billion oil platform for the project, but LADOL is alleging that there is a plot by Samsung and others to exclude it (LADOL) from the project.

The Egina platform has a projected production capacity of 200,000 barrels per day (b/d) and a storage capacity of 2.3 million barrels.

Also joined in the suit at the Federal High Court before Justice Aneke on Friday, January 24, are, Total Upstream Nigeria Limited (Total), Nigerian Content Monitoring Board (NCDMB), and the Minister of Petroleum Resources.

The $15 billion project is located 130 kilometers offshore Nigeria, and was conceived by Total Upstream Nigeria Limited, in collaboration with the Nigeria National Petroleum Corporation (NNPC), and is expected to take off by the end of 2017.

Egina DeepwaterIn the proceedings which were issued for LADOL by Fidelis Oditah QC, SAN, LADOL seeks 19 reliefs against Samsung and other defendants. It is 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 reliefs being sought by the company include 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.

At a hearing of the case on Friday, 24 January 2014, Mr Justice Aneke ordered the parties to maintain the status quo and not to take any steps to replace LADOL as the local partner of Samsung on the Egina FPSO Project, pending the hearing and determination of LADOL’s application for interlocutory injunctions, which was slated for Friday 7 February 2014.

– BUSINESS DAY

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

Published

on

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.

Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones

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.

 

Continue Reading

Business

Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

Published

on

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.

Continue Reading

Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

Published

on

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.”

Read Also: Offset Accuses Cardi B Of Cheating During Pregnancy

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.

 

Continue Reading

Copyright © 2022. Biztellers, powered by Alphaxristi.