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Buhari urged to stop work on Egina FPSO

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A Lawyer, John Owubokiri, has urged President Muhammadu Buhari to order contractors handling the construction of the Total’s Egina floating production, storage and offloading (FPSO) vessel to stop work on the platform until all the legal issues are resolved.

Owubokiri, who is a principal partner, Owubokiri & Co, said Buhari recognises the rule of law and due process, therefore, flagrant disrespect of the law by the owners of the Egina project should be dealt with to deter future occurrence.

Quoting Buhari’s inaugural address, he said he should “… ensure that there is responsible and accountable governance at all levels of government in the country. For I will not have kept my own trust with the Nigerian people if I allow others abuse theirs under my watch.”

He urged Buhari to keep his words and revisit the award of the Egina FPSO contract, adding that it is important to note that ongoing work at the Lagos Deep Offshore Logistics base (LADOL) yard is in breach of a subsisting Federal High Court order. LADOL is handling a component of the FPSO.

He said the Egina field development plan comprising Egina FPSO and other components, was approved by National Petroleum Investment Management Services (NAPIMS), an arm of the Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum Resources (DPR) in 2008 and 2009.

In 2009, Total placed advertisements requesting tender for the award of Egina FPSO. In response, Samsung, Hyundai and Technip submitted their respective tenders. The submissions were jointly opened by the relevant regulatory authorities including NAPIMS and the Nigerian Content Development Monitoring Board (NCDMB) on February 9, 2010.

In accordance with the laid down procedure, NAPIMS and NCDMB approved the list of pre-qualified tenders in 2010. The tender went through the three tiered NNPC approved process of prequalification: technical and commercial evaluation and at the end of the commercial analysis, Hyundai emerged the technically qualified lowest bidder. Technip was disqualified for submitting a non-compliant bid.

At the end of the process, which spanned four years (2008 and March 30, 2012), a memo signed by the Manager, Production Sharing Contracts (PSCs) Facilities; the General Manager, PSCs; and the Group General Manager, NAPIMS was presented to the former Group Executive Director, Exploration and Production, NNPC Mr. Abiye Membere, recommending Hyundai for the award of the contract. Total also recommended the award with number EGI/C115 to Hyundai. The NCDMB also recommended Hyundai for the award

Despite the recommendations, the then Minister of Petroleum Resources, Mrs Diezani Alison- Madueke, former Group Managing Director of the NNPC, Andy Yakubu and Membere awarded the FPSO contract to Samsung Heavy Industries at a higher cost. Besides, Samsung added another $300 million contract variation even before commencing execution of the project, Owubokiri said.

Owubokiri said: “Before the Egina award, Samsung had no track record of doing business in Nigeria and even though the company claimed it plans to create 50,000 jobs through the award, indications are that the claims are doubtful because Samsung yard in Korea does not have more than 10,000 people in employment. The LADOL yard where the FPSO integration is billed to take place is with over 1000 Koreans and only 300 Nigerians.

“Samsung had claimed that it was poised to invest $500 million following the award of the Egina project, which is also doubtful. The project is built on ripping off Nigerians. Whether it is Hyundai, Samsung or Daewoo, their goal is the development and promotion of the Korean economy and not the economy.

“I went to court seeking clarity surrounding this award, but the Attorney-General of the Federation, NAPIMS, the NCDMB, Samsung Heavy Industries and Total Upstream Nigeria Limited have refused to comply with a subsisting court order.”

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