By Our Correspondent
The Local Content gain of the Floating Production Storage and Offloading, FPSO that would drive the 200,000 barrels a day Egina oil field production operated by Total is being jeopardized by allegations of corruption and graft.
No matter how any one sees it, the truth indicates that activities of Samsung Heavy Industries, SHI, in Nigeria is well known for some reasons atleast it has helped to broaden Local Content implementation in the oil and gas industry.
The company by all standards successfully built and delivered the the multi-billion dollar Egina Floating Production and Offloading (FPSO) vessel which is expected to add 200,000 barrels per day of crude oil to Nigeria’s production by the end of this year.
But then the unfortunate side of the good for Samsung is the alleged graft and manipulation it has brought to bear in the execution and delivery of the Egina FPSO project.
An independent investigation by the a well circulated energy publication in 2013 and this month reported how Samsung Heavy Industries was handed over the Egina FPSO project after heavy bribing of corrupt government officials, who have also promised it other juicy upcoming contracts such as Shell’s Bonga and Zaba-Zaba led by Agip.
Giving more insight to this is a lawyer and Counsel to Lagos Deep Offshore Logistics Base (LADOL), Prof. Fidelis Oditah, who has accused Samsung Heavy Industries – a subsidiary of the Samsung Group – of trying to entrench its corrupt tendencies in Nigeria.
Professor Oditah stated this on the backdrop of alleged move by the South Korean company to take over land at the Lagos Free Trade Zone belonging to LADOL.
Speaking with journalists in Lagos recently, Oditah said Samsung was pressing to illegally take over the land and had written to both the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Port Authority (NPA), asking to be sold the portion of land inside LADOL, which was leased to it (Samsung) by LADOL for the Egina project.
Describing the action of Samsung as “unruly, against Nigeria’s local content law, and overall, unexpected from a mere contractor/tenant such as Samsung towards its landlord,” he made reference to corruption cases involving the company in other parts of the world, including the bribery case in Brazil, and said the company was trying to bring same to Nigeria.
“Nowhere in the world can a tenant overthrow its landlord. Samsung is a contractor in Nigeria, not an investor, and the land on which it built its facility was leased to it just for the duration of the Egina project, and is open to other contractors with similar projects.
“Samsung wrote to NIMASA and NPA, asking to be given part of LADOL’s land. If Samsung wants to build its own facility, it should first come in as an investor and ask for its own land, not LADOL’s land,” Oditah stated.
In accusing Samsung of bringing its corrupt practice to Nigeria, oil industry observers point to the under-hand dealings it allegedly used in winning the contract for the Egina FPSO project.
Samsung was reportedly the lowest bidder among the contractors who had vied for the Egina FPSO contract. However, according to sources, some “corrupt and unpatriotic Nigerians” had connived to swing the contract for Samsung, shoving aside some of the necessary conditions required of the would-be winner of the contract.
Specifically, the company was said to have been handed over project after heavy bribing of corrupt government officials and the top echelon of the Nigerian National Petroleum Corporation (NNPC).
Industry observers also point to Samsung’s alleged subversion of the Nigerian Content Policy in the execution of the Egina FPSO project. According to them, the integration of the topsides of the Egina FPSO at the LADOL yard in Lagos earlier this year had seen personnel being shipped into the country from South Korea to handle the very integration of the vessel originally planned to be handled by Nigerians at the LADOL yard. The development thus created jobs for the Koreans here in Nigeria to the detriment of the Nigerian labour force, against the provisions of the Nigerian Content Act and the promise by the Nigerian Content Development and Management Board (NCDMB), NNPC, and Total, the operators of the FPSO, that the project would create substantial number of jobs for Nigerians.
There is also an ongoing controversy about Samsung demanding an extra $300 million on the Egina FPSO project. Sources have not specified what the extra $300 million being demanded by Samsung is meant for, but it was learnt that Samsung was bent on collecting the money from Total and its Egina project joint venture partners, which include NNPC, before a final hand over of the vessel.
However, Samsung has denied these allegations calling bluff of those making them.
Recently Frank Ejizu the Chief Operating Officer, COO of SHI said due process was followed in the contract award and SHI commercial and technical bid was evaluated before the contract came it their favour against Hyuandai Heavy Industries.
He requested for documents to prove any allegations of bribery in the entire process.