Yemisi Izuora
A major oil field development, Egina, which is expected to add about 200,000 barrels of oil a day is about facing a major challenge following the decision of the Nigerian Ports Authority, NPA, to suspended service boats operations in all its pilotage districts until the full settlement of debts accruing from unpaid pilotage dues by International Oil Companies and other beneficiaries of the services.
Egina is the largest investment project currently on-going in the oil and gas sector in Nigeria and the overall progress of the project stands at 88 per cent and a key milestone was achieved on October 31st, 2017 as the Floating, Production, Storage and Offloading unit (FPSO) started its journey to Nigeria.
Oriental News Nigeria gathered that with this situation the NPA might prevent Engina FPSO, which is due to arrive Nigeria in January 2018, from accessing the Nigerian waterways.
According to a statement signed by Abdullahi Goje, the General Manager, Corporate and Strategic Communications at the NPA, the decision to stop the operation of service boats to debtor companies followed the failure and refusal of the affected companies to honour their obligations to the Authority in spite of several reminders over a couple of months to this effect.
The statement explained: “Concerning the suspension of service boat operations, the Authority, had written to companies owing pilotage dues, invoking provisions of ‘Appendix F’ of the operating agreement on ‘Delay Payment’ to the effect that a debtor company must make payment by telegraphic transfer within five (5) Business Days of the date of the relevant invoices. The clause stated further that: ‘Failure to pay the agreed sum will attract interest at a rate equal to LIBOR plus five per cent (5%) on the unpaid amount until the date of actual payment.’ The advice was ignored by all the companies concerned.”
Given the fact that the companies, some of whose indebtedness run into tens of millions of dollars outstanding for over two years, ignored the advice given by the NPA, the statement explained that the Authority had no choice than to pursue this course of action, which has been communicated to all companies concerned.
On the Engina FPSO, whose main component is currently sailing from South Korea to be coupled with its top side being fabricated at LADOL Free Trade Zone, Tarkwa Bay, the statement explained that the refusal of the parties involved in the project to request for towage and pilotage service from the NPA (being the only organisation empowered to provide same in the country), is contrary to the laws of the country and would be resisted.
It explained that notice has already been given to promoters of the FPSO to the effect that the vessel would not be granted access to Nigeria’s waterways and that the NPA would pursue legal remedies in its determination to ensure that no organisation impedes on the mandate of the NPA as provided in Part II of the Port Act.