TOTAL EGINA FPSO NEARING HOME, WHILE ANXIETY BUILDS
The Total Egina FPSO is almost making its arrival to Nigeria, according to a person familiar with the matter. The hallmark arrival of the FPSO into Apapa Wharf and LADOL Facility from Samsung Heavy Industries Shipyard in Goeje, South Korea would grace a triumphant entry orchestrating the coming of age of Nigerian Content Act.
Contrary to the earlier expectations that the FPSO was to arrive in April and later August as was showcased in the statement made by Younsay Won, Vice President Samsung Heavy Industries during a working visit of the Director General of Nigerian Maritime Administration and safety Agency (NIMASA), Dr Dakuku Peterside, the construction of the Egina FPSO have been delayed due to fatal accident at the shipyard which made work to be stopped at the construction site for more than two weeks . It was also heavily buffeted by legal tussle from onset, geopolitical quagmire within South Korea’s government and the Samsung Conglomerate and the deep desire of actualizing the technical aspirations of the users to ensure capacity and quality.
It should be recalled that at the commencement of the contract, LADOL, a junior partner in the $3.8 billion floating production contract sued Samsung Heavy Industries, the senior partner, in a Federal High Court, and other parties including Total Upstream Nigeria Limited, the Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian Ministry of Petroleum Resources for plotting to dump her from been the local partner of Samsung Heavy Industries in the project, after the company had used LADOL as the local content partner in winning the whopping contract.
According to LADOL, some of the steel fabrication of the project which was supposed to be done in her facility will create business opportunities for Nigerian companies, broaden employment and help to curb capital flight which is one of the major arrow of Nigerian Content against allowing Samsung Heavy Industries to do such fabrications outside the country or choose another partner. Such contract infringement, according to LADOL could cost Nigeria more than $200,000 million thereby shattering the goals of local content in the country. The resolution of this long lingering litigation led to the forming of a joint venture between LADOL and Samsung Heavy Industries.
In one of his notable statements after the hearing, Counsel for LADOL, Professor Fidelis Odita said that the case in question was a prime attempt or litmus test to weigh the efficacy of the Nigerian Content Act of 2010 and the fate of its enforcement in the industry. According to Professor Odita, “The contention of my client LADOL is that having been used by Samsung as the local content vehicle to win this major contract of $3.8 billion it is not open to Samsung to say that our client is no longer the local content partner. “What is even more perplexing in a case like this is that the contract allocated the sum of $214 million dollars for the construction of facilities at LADOL. This $214 million is part of what Samsung is trying to put in the pocket and sabotage the Nigerian economy by doing so, we say that the court should not allow them to do so,” he said.
It is apparent that many Nigerian companies such as NigerDock, Dorman Long, Aveon, FMC,and their partners have continued to benefit from the local domiciliation of part of the $15 billion Egina FPSO contract which could suffer some cost overrun due to delay and hitches. The Egina Deepwater Development is in OML 130, located 130 kilometers Offshore Nigeria, and has a projected daily production capacity of 200,000 barrels and storage capacity of 2.3 million barrel.
The high expectation of the arrival of the Egina FPSO is greatly heralded due to legal justification and precedence protecting Nigerian companies from their international partners in contractual issues. It remains a cardinal testimony for international operators to understand the efficacy of the Nigerian Content Act and its workability in terms of legal risks and its modus operandi.
The project also opened a new vista of economic buoyancy in terms of local business and massive employment. Added to that is the growing need of capacity building in terms of operations and maintenance of FPSO and Subsea technology in Nigeria