Vanguard News

Total’s $16bn Egina first oil under threat as Ladol sacks Samsung from dockyard

By Udeme Akpan & Ediri Ejoh
THE production of first oil from Total’s $16 billion Egina project is being threatened as the management of Lagos Deep Offshore Logistics, LADOL, banished Samsung Heavy Industries, SHI, from its dockyard.

Investigations by Vanguard, weekend, showed that first oil scheduled for December 2018 would likely be affected, especially as many equipment, including hook-up and commissioning materials, have been trapped at Ladol.

A senior official of SHI, who preferred not to be named because he was not authorised to speak, disclosed in an interview with Vanguard, yesterday, that some sub-contractors who were engaged for the commissioning had not been able to work.

He said SHI had been incurring high cost of operations without having the right environment for workers to operate.

He said:  “Many materials that are supposed to be put into use for the commissioning of Egina have been trapped at Ladol. Our sub-contractors cannot also work because they cannot access the dockyard.

“As expected, this development would likely affect our projection of producing Egina first oil in December, 2018.”

Already, Vanguard gathered that Total has appealed to Ladol to reconsider its position on SHI to ensure the successful commissioning and coming on stream of Egina.

Allegation

LADOL disclosed,weekend, that it banished SHI because of the company’s gross negligence and total disregard to Nigeria local content laws and other regulatory requirements.

It stated: “As a responsible Nigerian company, Ladol has put public duty and national interest ahead of its private interests and concerns for some time, with respect to the Egina project and the actions of Samsung.

“Samsung’s dealings in Nigeria in the past four years have been fraught with mischief and reckless disregard for all stakeholders: Ladol as business partners; Nigerian regulators; Nigerian workers and citizens. Samsung has brazenly and persistently flouted Nigerian laws and breached contracts it duly signed with Ladol and its affiliates.

Defence

But speaking with Vanguard, an official of SHI said: “The allegations are baseless. We have tremendous respect for local content and cannot disrespect the Act establishing it. If we have, we could have been uncovered and sanctioned by Nigerian Content Development and Monitoring Board, NCDMB that monitors our compliance. It should be noted that we have been working to train, build capacity and transfer technology to Nigerians.

“Besides local content, we have not flouted any law in Nigeria because we don’t deal directly with authorities on the project. It is the Global Resources Management Company Limited that relates with authorities on behaves of all entities.

“SHI did not canvass for any variation in contract sum as allegedly speculated because in Egina, we are talking about milestone payments, approved by the Nigerian National Petroleum Corporation, NNPC and Total, meaning that it is only NNPC/Total that can justify such variation, not SHI.”

Court

The two parties would likely continue to be in court as Ladol has already filed a court action (Suit No FHC/L/CS/1459/2018) against Samsung.

However, Vanguard’s investigations showed that some stakeholders, especially Federal Government and its agencies would intervene in the coming weeks to rescue Egina from crisis.

 

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