Amidst escalating dispute between the Oil and Gas Free Zones Authority (OGFZA) and the oil and gas logistic giant, Intels Nigeria Limited (INL) OGFZA has alleged that INL has not met the conditions for licence renewal.

INTELS

Earlier, last week, INL had indicated that OGFZA held back its licence renewal due to outstanding contention between the two organisation even after it had paid the renewal fee.

INL had listed some of the contentious issues including the imposition of land charges by OGFZA; nullification of INL’s Industry Wide Standard Tariff (IWST) and other port related charges by OGFZA.

But OGFZA said though the payment of a licence fee is necessary, it is not a sufficient condition for the renewal of a Free Zone licence.

In a statement, last night, the Managing Director of OGFZA, Mr Umana Okon Umana, said: “The payment of free zone licence fee by Intels does not in itself constitute a sufficient condition for the renewal of its operating licence for 2017.”

He also said that in line with Section 35(b) of the Act, OGFZA, in a letter, FZA/INTEL/02/FZE/VO1/007, received by INL on December 21, 2016, had requested INL to submit its audited accounts and other reports. According to him, INL has yet to meet that requirement and has not even responded to that letter.

He stated: “Intel’s explanation for non-compliance is that it has disputed some of the charges that it has been asked to pay. By its position, Intels is asking for the suspension of Section 35 of the Act so that it can meet the conditions for licensing, OGFZA said.

“We find your position quite unacceptable because payment of fees and any outstanding amount due to the Authority cannot be compromised on the altar of a purported dispute unilaterally set up by a prospective licensee,” OGFZA stated in its response to Intels’ protest letter December, last year.

OGFZA also said other licensees who had issues with the demand notices, took immediate steps to meet with the OGFZA in order to reconcile areas of differences.

Intels also disputed the land lease/sublease registration charge demanded by the free zone regulator, saying that the land it occupies was leased from the Nigerian Ports Authority (NPA) and not from OGFZA.

But Umana stated: “All the other Free Zone licensees, including concessionaires and tenants, have complied. We are rather surprised that they are now contesting the legality of the land lease/sublease charge after the team of OGFZA and Intels Nigeria Limited (INL) met to reconcile the demand notices, and INL accepted liability through the email of their Managing Director by confirming to OGFZA that an initial payment of $3m had been made by INL pending final reconciliation.”

On OGFZA’s refusal to renew the 2017 Operating License INL had in a letter to the regulator stated: “OGFZA has refused to release INL licence for 2017 on the ground that INL has to pay all charges and fees demanded by the OGFZA notwithstanding that INL has paid in full the renewal fee for the licence.”

“The other fees in question relate to new free zone tariffs on land charges imposed by the Free Zone (Tariffs & Other Charges) Order gazetted in 2015 but being implemented from 2017.  As you are aware, INL has raised some issues concerning the land charges (which are further enumerated hereunder) with the result that the claim by the OGFZA on INL for those charges are presently being disputed.

“The OGFZA takes the view that INL has not complied with Regulation 35(1) (b) (“payment of any outstanding sum due to the Authority”) and is therefore not entitled to have its licence renewed. The position of OGFZA is in grave error.”