An indigenous Nigerian oil company is suing major foreign players for allegedly plotting to exclude the local company from a $3.8 billion floating production vessel that was intended to be a local component of the project.
Lagos Deep Offshore Logistics (LADOL) is taking Korea’s Samsung Heavy Industries, Total Upstream Nigeria Limited, the Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian Ministry of Petroleum Resources before a federal high court over the issue.
LADOL accuses the parties of plotting to keep it from engaging in the local component of the $3.8 billion Egina Floating Production Storage Offshore (FPSO) vessel.
Related article: Africa Energy Advisory
More specifically, LADOL claims that a significant proportion of the steel fabrication and the integration of the FPSO topsides were intended to be carried out at its yard in the LADOL Free Zone in Lagos.
The contract for the project to build the $3.8 floating oil platform was won jointly by Samsung Heavy Industries and LADOL, according to the latter.
The FPSO project is intended for Total’s $15 billion Egina deepwater development, offshore Nigeria. However, recent development may lead to cost overrun and delay in the completion of the project.
The Egina deep water development 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.
The platform has a projected production capacity of 200,000 barrels per day and a 2.3-million-barrel storage capacity.
Related article: South Sudan not Ready for Oil Prime Time
According to LADOL, contract infringement could cost Nigeria $200 million earmarked for promoting the local content aspect of the Egina project, as well as over 50,000 jobs.
LADOL is seeking 19 reliefs against the parties, and calling on the court to make a declaration that the contract is subject to the Nigerian Oil and Gas Industry Content Development Act of 2010, among other things.
“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,” LADOL noted.
By. Joao Peixe of Oilprice.com