25th May, 2015
A Federal High Court sitting in Lagos, Southwest Nigeria has restrained the Attorney General of the Federation, National Petroleum Investment Management Services, Nigeria Content Development Monitoring Board, and two limited liability companies Samsung Heavy Industries Nigeria Limited and Total Upstream Nigeria Ltd, and their agents from taking any action towards the execution of the award of the contract relating to the Floating Production Storage and Offloading Unit (FPSO) in the Egina Field within OML130 pending the determination of the substantive suit.
The court also restrained the defendants and their agents from giving effect or implementing the award of the aforesaid Egina FPSO contract either by way of operating or executing same in any way whatsoever pending the determination of the substantive suit.
The presiding judge, Okon Abang gave the order after hearing the arguments and the submissions of the parties involved in the suit.
In an affidavit sworn to by a legal practitioner John Iyene Owubokiri and filed before the court by a Lagos Lawyer Barrister Olukayode Enitan, the plaintiff averred that the scope of Egina FPSO oil field which is expected to produce 200,000 barrels of oil per day as stated by Samsung Heavy Industries Nigeria Ltd is expected to create 50,000 jobs and is thus strategic to the future of the Nigerian economy.
Mr Owubokiri averred further that there are established guidelines by NNPC for tendering and award of fabrication projects in the oil and gas industry, but the guidelines were not complied with in the final award of the Egina FPSO to Samsung company, as there were alleged several irregularities and various breaches of extant laws of the Federal Republic of Nigeria in the award of the contract to Samsung. The defendants breached provisions of the Nigeria Oil and Gas Industry Content Development (NOGICD)Act 2010 and relevant laws guiding the fiscal regime of the oil and gas industry.
The NOGICD Act stipulates that Nigeria Content Development Monitoring Board established by the Federal Government of Nigeria for the supervision, coordination, monitoring and implementation of the Nigerian content plan in the Nigerian oil and gas industry shall approve advertisement, qualification criteria, technical bid document, technical evaluation criteria and the proposed bidders list in bids for project in excess of one million US dollars. The Egina FPSO contract is in the sum of 3,143,499,498 United States dollars.
It was further averred that Nigeria Content Development Monitoring Board established non-compliance with NOGICD Act in the technical evaluation criteria submitted by Total Upstream Nigeria Ltd Company and directed Total Upstream Nigeria to take corrective action before Nigeria Content Development Monitoring Board can grant the approval to proceed, but Total Upstream company ignored the directive of the Nigeria Content Development Monitoring Board. Consequently without approval, Total Upstream in contravention of NOGICD Act, proceeded to launch the commercial stage of the Egina FPSO contract, though Nigeria Content Development Monitoring Board did not approve the recommendation to award as prepared by the company regarding the Egina FPSO.
Mr Owubokiri, also contended that the covert launching by Total Upstream of its call tender without approval of technical stage and commercial template was in breach of the law, standard practice and the established process for tendering in the oil and gas industry.
The establishment of a fabrication yard in Bayelsa state was part of the Nigerian content plan put forward by Samsung Heavy industries Nigeria Ltd to secure the award of Egina FPSO contract which could have created thousands of job, enhance transfer of technology and skill acquisition for Nigerians.
However, after the award of the contract Samsung abandoned the establishment of the fabrication yard in Bayelsa state and now plan to carry out in South Korea the fabrication work meant to be carried out in Bayelsa state to the detriment of the Nigerian Economy.
National Petroleum Investment Company Management Services, a subsidiary of the Nigerian National Petroleum Corporation established to supervise the joint venture and profit sharing contracts operations of the NNPC and protect Nigeria’s strategic interest in joint venture companies did not recommend Samsung Heavy Industries to the Group Executive Committee of NNPC, therefore, in a way that totally subverted due process the Group Executive Committee of NNPC proceeded to recommend Samsung to the Board of Directors of the NNPC for the award of the Egina FPSO contract.
Consequently, the plaintiff, urged the court to restrain the defendants from implementing the award of the contract in order not to present the court with a fait accompli before determination of the suit.
In a counter affidavit sworn to by a legal practitioner, Olajide Oyewole, on behalf of Samsung Heavy Industries the deponent while denying some of the averments of the plaintiff averred that the plaintiff’s private rights have not been infringed as he has not shown that he has suffered any special damage peculiar to himself apart from the public. Consequently, he urged the court not to grant the plaintiff’s application.
In its own response, Total Upstream Nigeria Ltd in an affidavit sworn to by a Lagos lawyer, Chidiebere Ejiofor, urged the court to dismiss the application of the plaintiff on the ground that the Total Upstream, is challenging the jurisdiction of the court to entertain the suit, and that the court ought to hear and determine the preliminary objection first, before entertaining any further motion of the plaintiff.
Attorney General of the Federation, National Petroleum Investment Management Services and Nigeria Content Development Monitoring Board did not file any response.
Justice Okon Abang in his ruling while adjourning till 28th May, 2015 for further hearing restrained all the defendants and their agents from implementing the award of the said contract in contention pending the determination of the substantive suit.