A Review of the Nigerian Energy Industry

Egina FPSO: LADOL accuses Samsung of contravening court order

Proposed EGINA-FPSOYemie Adeoye

13 March 2014, Sweetcrude, Lagos – The lingering controversy between the Lagos Deep Offshore Logistics, LADOL, and Samsung/Total over the $3.8 billion Egina Floating Production Storage and Offloading, FPSO, project has taken a fresh twist with LADOL – the plaintiff in a suit in a Federal High Court in Lagos – accusing Samsung Heavy Industries, SHI – the first defendant – of breaching an earlier ruling by Justice Chukwu Jeku Aneke of the Federal High Court that parties maintain the status quo on the matter pending the determination of the suit.

Counsel to LADOL, Professor Fidelis Odita (SAN), had told the court that despite the court order of January 24, 2014, Samsung,  had on February 27th and 28th 2014, made presentations to the Nigerian National Petroleum Corporation, NNPC, on its plans to replace LADOL with another company as its third party local content partner for the project.

 The contract awarded to Samsung Heavy Industry and indigenous company, LADOL by Total for the integration of an FPSO for the Egina project went into litigation following alleged schemes by Samsung to exclude the indigenous firm from the contract.

LADOL’s allegation of breach of court orders by Samsung is coming as the fourth defendant in the suit, the Federal Ministry of Petroleum Recourses, again failed to make representation at the court’s proceedings. Others joined in the suit are Total Upstream Nigeria Limited (Total), and the Nigerian Content Development Monitoring Board, NCDMB.

Justice Aneke who frowned at the alleged breach of his order for parties to maintain the status quo, was apparently not taken- in by the defense counsel, Wole Olanipekun’s claim of ignorance of his client’s presentation to NNPC.

“If this allegation is found to be true, it is a very serious issue”, the judge declared.

The judge however adjourned hearing to April 16, 2014, following the ‘conditional appearance’ (appearance for the first time) of the counsel to the third defendant, NCDMB, Chidi Ilogu (SAN), who pleaded for time to enable him prepare as well as file certain applications he intended to bring before the court.

Speaking with journalists after the hearing, Counsel to LADOL, Professor Fidelis Odita, said the case at hand was an attempt for the first time, to test the efficacy of the Nigerian Local Content Act 2010, as it relates to its enforcement in the nation’s Oil and Gas Industry.

“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 for the construction of facilities at LADOL.  This 214 million dollars 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”.


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