The Nation Newspaper

Tag: Egina FPSO

  • Egina FPSO: LADOL denies Samsung’s $300m FDI claim

    Lagos Deep Offshore Logistics Base (LADOL) has accused its local content partner in the fabrication and integration of the $3.1billion Egina FPSO and the parent company of SHI MCI FZE, Samsung Heavy Industries Nigeria (SHIN) Limited,  of misrepresentation. Its claim that it made a foreign direct investment of $300 million into Nigeria during the construction of the fabrication and integration yard in LADOL Free Zone is being considered.

    Its counsel, Fidelis Oditah (SAN), said that contrary to Samsung’s claims, SHI was paid as a contractor to build the fabrication and integration facility at LADOL as a part of the Egina FPSO package contract.

    Samsung, he insisted, is a contractor not an investor in respect of the facility, adding that it invested nothing in the construction of the yard.

    According to him, “In summary, Samsung committed at least three frauds and misrepresentations in connection with the June 2014 Settlement Agreement in order to induce LADOL to surrender its 80 per cent equity ownership of SHI MCI FZE and the fabrication and integration facility: The first is the fraud by which Samsung took LADOL’s equity in SHI MCI FZE and gave itself 70 per cent ownership of a fabrication and integration facility which was approved by the FGN and funded by Total as the poster child of Nigeria’s local content policy in respect of the Egina FPSO project.

    “Samsung thus misappropriated a local content facility and claims it owns facility that with which it could do as it pleases. This is a massive fraud against LADOL and Nigeria by depriving LADOL and Nigeria of a capacity development project which they had planned to use to benefit Nigeria by attracting other investments and creating at least 50,000 direct and indirect jobs. Similarly, by completely excluding LADOL from the facility, Samsung ensured that there was no technology transfer to Nigerians.”

    He added, “The second misrepresentation is that there was no US$214 million provision in the Egina FPSO contract allocated to the construction of the new fabrication and integration facility at LADOL, with which fraud and misrepresentation it procured LADOL to surrender its 80 per cent ownership of SHI MCI FZE, the fabrication and integration facility owning vehicle.”

    According to him, there are three aspects to the dispute between Samsung and LADOL. “The first is the ownership of SHI MCI FZE, which is a joint venture between LADOL and Samsung formed to perform the Egina FPSO EPC contract between Samsung and Total Upstream Nigeria Limited (Total). The second aspect is SHI MCI FZE’s sublease agreement with a LADOL affiliate, Global Resources Management Limited (GRML). The third is SHI MCI’s operating licence as a free zone enterprise within the LADOL free zone. Samsung, on the other hand, has remained consistent in its assertion of ownership of the fabrication and integration facility on the basis that it had singlehandedly funded the construction of the facility, which it claims to be US$300 million, “he said.

    Samsung has however, remained consistent in its assertion of ownership of the fabrication and integration facility on the basis that it had singlehandedly funded the construction of the facility, which it claims to be US$300 million.

    It described as false, a claim by the management of LADOL Free Zone in Lagos that the integration and fabrication yard in the free zone does not belong to Samsung, saying it invested $300 million to build the yard.

    The company maintained that it did not receive any money from any international oil company (IOC) to build the yard in LADOL free zone.

    “This issue has even been brought in the Senate and has been cleared years back. However, LADOL brought this issue back to light to make their name famous by using Samsung as a leverage. For the record, SHIN did not receive any money from any IOC for the establishment of the yard. One hundred per cent of the investment was made by SHIN’s own money. LADOL has not invested any cent into that yard and SHIN is fed up with LADOL’s mis-representation, ”it stated.

    SHI, which also accused LADOL of misleading its lawyer, also described as unethical, the statements credited to the lawyer on matters that were already before the courts.

  • EFCC to investigate $3.8bn Egina FPSO project – Magu

    The acting chairman, Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, has said the commission will look into the award of $3.8 billion to build Egina Floating Production Storage Offloading (FPSO) to Samsung Heavy Industries (SHI).

    The contract to build $3.8 billion Egina FPSO project was awarded by the Nigerian National Petroleum Corporation in 2013 to SHI.

    He made the promise when two civil society organisations, Nigerian Young Professionals Forum, (NYPF), and Connected Development (CODE) submitted a petition at the EFCC office, in Abuja on Tuesday.

    The petition was signed by NYPF’s Chairman, Mr. Moses Siasia and the Chief Executive Officer, CODE), Hamzat Lawal.

    The petition was received by EFCC’s Head, Media and Publicity, Wilson Uwujaren, on behalf of Mr. Magu.

    Mr. Magu assured the petitioners that the EFCC, as a commission, would consider the allegations raised in the petition and subject them to test.

    He said: “I want to assure you that we will take this petition through the normal process through which we receive petitions in the commission.

    “For us, this is merely an allegation but we will subject it to test and if it is worthy of investigation, the commission will duly investigate it and you will get to know our findings.”

    In the petition, Mr. Siasia and Lawal, called for a thorough investigation into alleged irregularities surrounding SHI and Samsung Korea and their involvement in the Egina FPSO project.

    According to them, the investigation should include the estimation of the resulting losses to Nigeria’s economy.

  • Senators laud Total, partners on Egina FPSO

    The Senate Committees on Gas and Petroleum Resources (Upstream) have commended Total and its partners for the progress made in the completion of the Egina Floating Storage, Production and Offloading (FPSO) vessel, being finalised at the Samsung Heavy Industries (SHI) shipyard in LADOL Free Zone, Lagos.

    The Senate Committee Chairman on Petroleum Resources (Upstream), Senator Omotayo Alasoadura, and his counterpart, Senate Gas Committee Chairman, Senator Barnabas Gemade, led their committees’ members on an inspection of the 330m-long Egina FPSO, where they expressed delight with the pace of work on the unit and its massive Nigerian content.

    “Seeing the Egina FPSO has shown that a good investment has been made to ensure that Nigeria moves deeper and deeper into the sea to exploit its God-given endowment of oil,” Senator Alasoadura said, pointing out that touring the FPSO facility had been a very wonderful experience.

    “I believe that with Egina going operational very soon, Nigeria will be able to meet its quota not only to the Organisation of Petroleum Exporting Countries (OPEC), but also will have enough to meet its other commitments. I believe that it is a good project and Total has done a great thing bringing such a facility to Nigeria for integration of locally fabricated modules, making it first in Africa. This milestone has brought us to where we should be as the giant of Africa,” he added.

    On the local content work being done on the project, Senator Alasoadura said: “It is massive development of capacity. You cannot do much for local development without building capacity and that has been done by giving Nigerians the opportunity to build part of what we are seeing here today. I am sure the next time it will take less money and time to build something similar because of developed capacity.”

    Senator Gemade said: “We are very excited about the participation of Nigerians that are technically qualified in major and huge projects like Egina. This impact cannot just be swept under the carpet.Those responsible for actualising this project must be commended.”

    The Managing Director of Total Upstream Companies in Nigeria, Mr. Nicolas Terraz, thanked the senators for taking the time to visit the Egina FPSO saying, “What you are seeing here is a product of the hard work of our staff, many of whom are Nigerians, along with our very supportive partners and Nigerian authorities.”

    Other senators on the visit were Senators Gershom Bassey, Magnus Abe, Samuel Egwu, Peter Nwaoboshi, Benjamin Uwajumogu, Baba Garbai, Ogola Foster and Ibrahim Kurfi.

    Being the first project to be launched after the enactment of the Nigerian Oil & Gas Industry Content Development Act in 2010, the ongoing integration and work on the Egina project pushes the Nigerian local content on the project to the highest level and has set a benchmark for the Nigerian oil and gas industry.

  • Senators praise Total, partners on Egina FPSO

    The Senate Committees on Gas and Petroleum Resources (Upstream) have commended Total and its partners for the remarkable progress made towards the completion of the Egina Floating Storage, Production and Offloading (FPSO) vessel, which is currently being finalized at the Samsung Heavy Industries (SHI) shipyard in LADOL Free Zone, Lagos.

    who is chair of The Senate Committee Chairman on Petroleum Resources (Upstream), Senator Omotayo Alasoadura, and his counterpart, Senate Gas Committee Chairman, Senator Barnabas Gemade, led their committees members on an inspection tour of the 330m-long Egina FPSO, where they expressed delight with the pace of work on the unit and its massive Nigerian content profile.

    “Seeing the Egina FPSO has shown that a good investment has been made to ensure that Nigeria moves deeper and deeper into the sea to exploit its God-given endowment of oil,” Senator Alasoadura said, pointing out that touring the FPSO facility had been a very wonderful experience.

    “I believe that with Egina going operational very soon, Nigeria will be able to meet its quota not only to the Organisation of Petroleum Exporting Countries (OPEC) but also will have enough to meet its other commitments. I believe that it is a good project and Total has done a great thing bringing such a facility to Nigeria for integration of locally fabricated modules, making it first in Africa. This milestone has brought us to where we should be as the giant of Africa,” he added.

    On the local content work being done on the project, Senator Alasoadura said: “It is massive development of capacity. You cannot do much for local development without building capacity and that has been done by giving Nigerians the opportunity to build part of what we are seeing here today. I am sure the next time it will take less money and time to build something similar because of developed capacity.”

    In his remarks, Senator Gemade said: “We are very excited about the participation of Nigerians that are technically qualified in major and huge projects like Egina. This impact cannot just be swept under the carpet. Those responsible for actualising this project must be commended.”

    The Managing Director of Total Upstream Companies in Nigeria, Mr. Nicolas Terraz, thanked the senators for taking the time to visit the Egina FPSO saying, “What you are seeing here is a product of the hard work of our staff, many of whom are Nigerians, along with our very supportive partners and Nigerian authorities.”

    Other senators on the visit were Senators Gershom Bassey, Magnus Abe, Samuel Egwu, Peter Nwaoboshi, Benjamin Uwajumogu, Baba Garbai, Ogola Foster and Ibrahim Kurfi.

    Being the first project to be launched after the enactment of the Nigerian Oil & Gas Industry Content Development Act in 2010, the ongoing integration and work on the Egina project pushes the Nigerian local content on the project to the highest level and has set a benchmark for the Nigerian oil and gas industry.

  • Nigerdock delivers fabricated structures for Egina FPSO

    Nigerdock delivers fabricated structures for Egina FPSO

    • Firm rebrands training, development academy

    Leading indigenous energy services company, Nigerdock, has successfully fabricated and loaded out structures for the Total operated Egina Floating Production, Storage and Offloading (FPSO) vessel.

    The structures were fabricated at Nigerdock yard located at Snake Island Integrated Free Zone (SIIFZ) Lagos, by the company’s professionally-trained Nigerian workforce. With the completion and load out of the structure, Nigerdock has done a substantial tonnage for the floating vessel surpassing other energy services providers locally.

    The structures include the Riser Porch, Flare Tower, Helideck, Protection Structure, Access Tower, Crew Boat Bathing, Crane Pedestal, Telecom Mast, Living Quarter Blocks, Laydown Area Blocks, Muster Station, Work Boat Structure, and Vertical Caissons, among others, with a combined weight of 7336 tonnes, were loaded out in phases at Nigerdock’s industry facility, renowned as West Africa’s largest shipyard.

    Nigerdock fabricated and loaded the 732-ton Flare Tower Structure for the Egina FPSO in March last year, which sailed away to Korea for initial integration of the fabricated structures onto the FPSO.

    Speaking at the loadout ceremony of the structures, Group Managing Director, Jagal Energy, Chris Bennett, praised the management and staff of Nigerdock for their contributions towards the accomplished project. He said the timely delivery of the fabricated structures for Egina FPSO was another significant achievement and boost to the local content initiative in Nigeria.

    “Nigerdock remains the foremost local content champion, committed to the vision of building the country’s local capacity and delivering value to the economy. Our capacity and capabilities have been reaffirmed through the success of Egina FPSO Project. It gives our clients and the government a measure of confidence, trust and reassurance that Nigerdock, can operate with global best practice.

    “We continuously set the highest standards, which is why we have recorded a series of firsts in the industry. Remarkably, these projects were executed in Nigeria without any lost time injury (LTI), which compares with best in class in Europe and America,” he said.

    A prime advocate for developing Nigerian Content, Nigerdock epitomises the values of the Nigeria Oil and Gas Industry Content Development (NOGICD) Act 2010, which emphasises the development of local skills, technology transfer, local manufacturing and use of local manpower to upgrade Nigeria’s manpower capacity, with results that benefit the government, private companies, and Nigeria’s economy.

    The FPSO is being developed for deployment in the Egina Oil field, located 150km off the coast of Nigeria. The field is currently under development and production is scheduled to begin in 2018. Nigerdock was selected by Samsung/ Total for critical in-country fabrication works and training services as the provider of choice.

    Also Nigerdock in line with its commitment to enhance Nigeria’s local capacity and provide competent indigenous workforce for the energy services sector, unveiled its re-branded Training and Development Academy, the foremost indigenous institution offering the highest quality and competence needs-based training for its workforce and clients in the sector.

    The fully-equipped academy, which was unveiled last week, is a globally recognised centre that has been training tradesmen and professionals for over three decades, recording over 6,000 trainees in various skills including project management, quality assurance, occupational health and safety, welding, fitting, painting and coating, machining, lifting, rigging and scaffolding, among others.

    Representatives of the Nigerian Content Development and Monitoring Board (NCDMB), Oil and Gas Trainers Association of Nigeria (OGTAN), Nigerian Institute of Welding (NIW), International Oil and Gas Companies (IOCs) as well as business partners, graced the occasion and commended Nigerdock for its consistent efforts to bolster local content and put Nigeria on the global map in terms of complex oil and gas projects delivery.

    Group Corporate Affairs Director, Jagal, Joy Okebalama, noted that by re-branding the centre, the company will be able to replicate its excellent quality footprints in the industry. It will also be able to increase its accreditation portfolio, enable partnerships with relevant public and private organisations, equip Nigerian youths with skills for employment and life and will ultimately be franchised across Nigeria with the bid to offering internationally accredited qualifications in various disciplines.

  • NCDMB, NIMASA, others back in-country integration of Egina FPSO

    The  Nigerian Content Development and Monitoring Board (NCDMB) has thrown its weight behind the in-country Egina floating production, storage and offloading (FPSO) units at the SHI-MCI yard in Lagos.

    A joint venture between Samsung Heavy Industries (SHI) and Lagos Deep Offshore Logistics Base (LADOL), the the firm’s objective is to build and integrate ships and FPSO vessels.

    SHI-MCI FZE known as Samsung Heavy Industries -Mega Construction Integration Free Zone at the LADOL Free Zone in Lagos is handling a part of the integration that will produce Egina Deepwater Field in Oil Mining Lease (OML) 130 to be operated by Total Upstream Nigeria Limited (TUPNI).

    SHI is the main contractor, while LADOL is a subcontractor and one of the local content vehicles for the FPSO project.

    Beside NCDMB, other agencies supporting the local integration of Egina FPSO are Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA), Nigerian Customs Service (NCS) and the Nigeria Export Processing Zones Authority (NEPZA).

    According to the Executive Secretary of NCDMB, Simbi Wabote, the integration at the SHI-MCI fabrication yard would collaborate with the Board and ancilliary agencies, adding that this would be the first time this would happen in the country.

    The agencies declared their commitments to the project after inspecting the FPSO under construction at the SHI yard in Geoje, South Korea.

    The FPSO is scheduled to sail in June and will arrive in the SHI-MCI yard in Lagos, in September, where the six modules fabricated in-country will be integrated, with 21400 pre-inauguration tasks it is expected to be performed. After the integration, the FPSO will be towed to the Egina field, about 200 kilometres south of Port Harcourt, the Rivers State capital and hooked-up for operation.

    Speaking during the visit, Wabote urged TUPNI to identify issues that required the Board’s intervention ahead of the arrival of the FPSO. Such approvals as authorisations for expatriates would lead the integration, towing of the FPSO and other scopes, would guarantee the smooth conclusion of the project, he said.

    He underscored the importance of the Egina project to the economy, particularly the addition of 200,000 barrels to the country’s daily crude. Egina will also contribute to the Federal Government’s commitment to address production decline and shore up national revenue.The  industry needs more projects to build capacity and keep facilities from wasting, he added.

    Wabote hailed Total and SHI for their Nigerian Content credentials on the project, adding that such huge Nigerian content happened in the project because of the push by the NCDMB, though Total was convinced it still needed a little push.

    “We are happy with the progress of the project and its contribution to local content and the national economy. FPSOs have been built abroad in the past and moved straight to site. This is the first time that many Nigerians will see what it looks like.”

    The NCDMB  chief also announced plans by the Board to organise a knowledge sharing session on Nigerian Content to enable international oil companies (IOCs) share strategies they deployed in their projects. The session, he explained, would ensure that IOCs leverage local Content experiences of others when planning projects or faced with similar challenges.

    NCDMB, he said, was developing guidelines that would ensure that Nigerian companies participate in the operations phase in oil and gas projects, noting that the sustainability of the Nigerian Content lies in the operations phase which often lasts about 25 years.

    TUPNI Deputy Managing Director, Mr. Ahmadu Kida Musa, commended the collaboration between his firm and the NCDMB teams on the Egina project, charging the Board to continue pushing the boundaries of Nigerian Content implementation.

    He commended regulatory agencies that pledged to support the in-country integration phase, noting: “Some of the things we will be seeing have not been done in Nigeria. We would need accelerated approvals while not breaking the law.”

    He praised SHI and LADOL for forming the consortium that has made  FPSO integration possible, noting that they had positioned themselves for future projects. He challenged the partners to work together to further develop the yard to attract the African market.

    SHI-MCI Managing Director  Mr. C. W. Kim, reaffirmed his firm’s preparedness to help Nigeria boost its technological knowhow. This informed the decision to make the long-term investment, he said.  “We decided to invest in Nigeria for the long term, not just for Egina. It would not make sense to invest for just one project; it needs several projects. We have capacity in construction and we have been in business for over 40 years. To succeed in Nigeria, we plan to be competitive and operate with a long term plan,“ he added.

    The in-country integration of the FPSO and fabrication of six modules of the vessel created 5000 direct jobs and 5000 indirect jobs.

  • Egina FPSO: Contempt proceeding on March 27

    A Federal High Court in Lagos has adjourned till March 27 hearing in  the contempt proceedings against Samsung Heavy Industry Nigeria Limited and Total Upstream Nigeria Ltd, over their alleged disobedience of a court order that parties should maintain status-quo in the controversial Floating Production, Storage and Offloading (FPSO) unit in Egina Field within OML 130 contract.

    The Attorney-General of the Federation; National Petroleum Investment Management Services (NPIMS); Nigerian Content Development Monitoring Board (CDMB); Samsung Heavy Industry and Total Upstream are the defendants.

    The plaintiff, Mr. John Owubokiri, is asking the court to declare that the award of the contract to Samsung Heavy Industry Nigeria  for the engineering, procurement, construction and commissioning of the Egina FPSO is unlawful, tainted by irregularities in that NPIMS, CDMB and Total Upstream Nigeria ignored all extant laws, regulations, directives, and guidelines guiding such awards.

    Justice Okon Abang  last year ordered the defendants to “maintain status quo ante bellum as per the plaintiff’s claims before the court pending the hearing and determination of the motion on notice dated 19/11/2014.”

    But the plaintiff had complained that work was still on-going on the contract, despite the court orders.

    The judge said he would hear the defendants’preliminary objection after trial because it was not filed within the time allowed by the court’s rules.

     

     

     

  • Egina FPSO: Samsung debunks increase in contract cost, others

    Egina FPSO: Samsung debunks increase in contract cost, others

    The contractor handling Total’s Egina field’s floating production, storage and offloading (FPSO) vessel, Samsung Heavy Industries (SHI), has denied adding variation cost of $300 million to the initial cost of the project, which was $3.2 billion, following the feud it had with Ladol, its Nigerian partner, which delayed project.

    It was alleged that the cost of the floating vessel rose to $3.5 billion as result of the variation and the company is not creating employment for Nigerians, in compliance with the Nigerian Content directives, but the company’s General Manager, Frank Ejizu, said the allegations are incorrect.

    He said: “I don’t think you got that variation quite correct because I’m not aware of the $300 million variation cost as you just said. Yes, we had slight delay in the project at the initial stage, which has been resolved and the delay will in no way impact on the cost of the project.

    “It was just a delay between us and LADOL. It will not have any significant impact on the cost of the project. If you listened to our presentation, the fabrication project will be completed by end of 2016 while the integration work will start in January 2017.

    “However, on the impact of this project on the local content, we are complying with the Local Content Act, which will translate into creating employment for our youths in Nigeria. It’s almost impossible to have a project without job creation.

    “I think the entire engineering programme is about $16 million; I think what matters is how well managed any delay is because it is always inevitable. And also how well managed is the cost control. So I don’t think there is any significant complaint from employers because they recognise that in this kind of project there are some areas the cost may go down or may go up and all that over the period.”

    Ejizu also discredited the allegation that the original design of the FPSO will be altered. He said: “No there will not be any alteration in the design of the FPSO.” He also dismissed the allegation that Samsung is not training Nigerian welders for the project. He said Samsung and its Nigerian partner,  the LADOL Integrated Logistics Enterprise, owners of Lagos Deep Offshore Logistic Base (LADOL), formed a new company called SMI-MCI FZE (Samsung Heavy Industries –Mega Construction Integration Free Zone), which will solely handle jobs that would be carried out at LADOL.

    The Chairman of LADOL,  Oladipo Jadesimi,  also said the disagreement between Samsung and LADOL has since been resolved for the interest of the economy, adding that over 1,500 jobs including welders will be created at LADOL alone.

    He said: “On the so-called legal tussle, there were some unresolved issues between Samsung and Ladol, which ended in a slight disagreement and the parties went to court but I can assure you that in line with international best practices, parties didn’t allow such a huge project with significant implication for the Nigerian economy to stay too long in court and parties sorted their difference out in the overall interest of the Nigerian economy and this project.

    “You can see we are on course, all outstanding issues have been resolved, the case in court has been withdrawn and we are set to go. On employment, this project at peak period will employ 1,500 people but all these people will not be employed at the same time because the project is in phases. We will employ a minimum of 1,500 people at the peak period of this project. The fabrication for this integration project is not only being done in Ladol. So when you are asking in terms of employment, this project will create employment outside of Ladol in other fabrication yards and also there is local supply chain and I think for every single direct job, there are five indirect jobs to go with  it, so that figure has to be quantified very carefully.”

    On allegations of not securing the necessary approvals and the dumping of the agreement to build a construction and fabrication yard in Bayelsa State, the company said: “All the approvals have been secured and we have the support of the government and the project we have is quite very huge, so we want the government to continue to support us in the future to realise the aspiration of government in the area of industrialisation.

    “We plead that government continues to create the right environment for the project to be realised. On Bayelsa yard, Samsung Industries didn’t come here only for one or two projects. We have a very long term view inside of Nigeria and we have this country as the hub for our West Africa oil and gas activities. It is part of our plan; we want to extend our presence beyond Lagos besides that of Ladol and other partners.