September 26, 2018

Settlement on $300m FTZ facility subject to our terms — LADOL

…As groups petition Presidency over SHI’s activities in Nigeria

By Ediri Ejoh

lagos—Following recent sack of Samsung Heavy Industries, SHI, from the free zone, the management of Lagos Deep Offshore Logistics (LADOL) has expressed its willingness to reconcile rift with SHI.

The company, however, disclosed that it was ready to renegotiate ownership of the $300 million integration and fabrication yard at the Lagos Free Trade zone, FTZ, only on its terms.

Addressing newsmen, Counsel to LADOL and its free zone management, Prof. Fidelis Oditah, stated that three aspects to the dispute involve, “First, the ownership of SHI MCI FZE, which is a joint venture between LADOL and Samsung formed to perform the Egina Floating Production Storage and Offloading (FPSO) EPC contract between Samsung and Total Upstream Nigeria Limited.

“The second aspect is SHI MCI FZE’s sub-lease 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. “We are very happy to work with SHI, not on its own terms but ours.”

Meanwhile, SHI had already issued a notice of contempt proceedings against certain directors of the LADOL zone management, saying its operating licence was not renewed and consequently it was unable to access the LADOL free zone.

The publication of the contempt proceedings followed a publication to the effect that the court had restrained LADOL zone management from violating SHI MCI FZE’s operating licence.

Recall that a right group had called for an urgent presidential inquiry into the operations of SHI, involved in the multi-billion dollar Egina Floating Production Storage Offloading (FSPO) fabrication project.

The groups, prominent among which are Nigerian Young Professionals Forum, led by Moses Siloko Siasia, and Connected Development, with Hamzat Lawal as Chief Executive, sent a co-signed letter to the Presidency detailing what are considered as the underhand dealings of the foreign company.

They noted that: “As events have unfolded over the years, however, it is clear that the Samsung Heavy Industries (SHI’s) engineering, procurement and construction of the Egina FPSO has been a sham calculated to massively defraud the Nigerian commonwealth, undermine the extant laws and signal corporate corruption of monumental proportions in the highest corridors.”

However, the groups urged the Presidency to sanction SHI, not only in view of the massive level at which it has violated local content laws, but equally the scale of economic sabotage involved in its activities, as the Korean firm is alleged to have deliberately frustrated the project.