The Lagos Deep Offshore Logistics (LADOL) has taken Samsung Heavy Industry and its allies to court, over plots to exclude the former from a $3.8 billion Egina Oil platform project which it jointly won late last year.
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 $3.8 billion facility located 130 kilometers offshore 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.
The Egna platform 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.
Apart 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 issued for LADOL by Professor Fidelis Oditah QC, SAN, LADOL seeks 19 reliefs 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 reliefs 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.
LADOL, said to be the only wholly Nigerian indigenous oil and gas service provider is 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.
LADOL is also seeking an injunction restraining Total from paying to Samsung or anyone else any money in respect of any aspect or part of work scope (fabrication of steel structures and integration of the FPSO topsides) allocated to LADOL 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.