A Review of the Nigerian Energy Industry

Samsung shuns Nigeria content, awards mooring contract to UK firm

Samsung Heavy Industries.
Samsung Heavy Industries.

10 April 2015, Lagos – In apparent disregard for Nigeria’s Local Content laws, Samsung Heavy Industries has awarded a United Kingdom-based firm, Bridon, a mooring cables supply contract for the Egina oil field.

The contract, according to a statement by the Bridon is scheduled for delivery by the end of September this year.

Doncaster-based Bridon, according to a statement by the company, supplies wire and fire rope, with a design life of 25 years, each complete cable reel will weigh an impressive 185 tonnes, or more than 15 double decker buses.

Commenting on the deal, Andy Dodwell, Bridon’s Commercial Director, said: “This demonstrates another significant achievement in our manufacturing capabilities, being the longest mooring cable Bridon has manufactured for more than a decade.

“Samsung Heavy Industries placing their confidence in us for this critical project mooring demonstrates Bridon’s position and status in technology leadership.”

The Egina oil field is located 150 kilometers off the coast of Nigeria and covers an area of up to 500 square meters. Oil reserves are estimated at 550 million barrels.

The statement noted that the Bridon Technology Centre in Doncaster is one of the world’s most advanced facilities for the development and testing of offshore ropes.

It added that the £5 million high-tech hub is a state-of-the-art facility, opened in 2013 to drive forward and enhance Bridon’s research and product development capabilities.

Continuing, Dodwell said: “We have significantly developed our global service offering, investing in purpose-built testing equipment. As a result of our innovations, the largest, most advanced ropes ever made are being sold around the world from Britain, helping to solve the challenges our modern offshore industries face.”

Formerly British Ropes Limited, the company was formed in 1924 from an amalgamation of wire rope and fibre rope manufacturers, the earliest of which date back to the late 18th century.

Bridon was acquired by Ontario Teachers’ Pension Plan in November 2014 from Melrose Plc for £365 million.

Total sales in 2013 were £266.4m. As part of the sale, former owner Melrose will contribute £6.7m into the Bridon Group 2013 Pension Scheme.

Earlier this year the firm acquired Norwegian business ScanRope – a 77-employee manufacturer of steel and fibre deep water mooring systems – from the Parker Hannifin Corporation.

Bridon chief executive Jonathan Templeman said the acquisition was exciting and strengthened their position as the clear market leader in the sector.

The group operates 12 factories worldwide with technical and sales offices, supported by a global network of agents and distributors. It has four factories in the UK, located in Doncaster, Coatbridge, Willington Quay and Neptune Quay and employs 700.

PwC completes 14-year Enron administration

Pricewaterhouse Coopers (PwC) has announced that its work on the UK Enron administration is now complete, with £2 billion in dividends paid out, 14 years after the firm was first appointed when the energy firm collapsed in 2001 with the loss of 21,000 jobs.

Tony Lomas, partner at PwC, who oversaw the administration, said that at the time when Enron filed for bankruptcy in the US and administration in the UK, ‘this was the biggest and most complex insolvency the world had ever seen.’

On appointment, PwC took control of eight separate Enron Group companies and went on to run significant businesses, sell high value assets and agree a series of complex claims made against the group.

Lomas said: ‘There were a number of milestones achieved, including managing the groups’ interests in two UK power stations; selling 7% of the UK’s annual gas supply for a four-year period; completing the first ever sale of a credit derivatives book out of insolvency, selling two regulated metal trading companies and selling a major North Sea gas transportation pipeline contract.’

Over that time, PwC worked with the creditors’ committees and negotiated the claims of hundreds of creditors and more than 1,000 employees.

Now final dividends from the remaining companies have been declared, bringing the dividend total to £2 billion. The firm says a ‘significant sum’ of unclaimed dividends is to be shared between a number of different charities, now that insolvency proceedings are complete.

Enron’s collapse after the company filed for Chapter 11 bankruptcy in the US was highly controversial, following revelations of fraud and money laundering.

Its former chief executive, Jeffrey Skilling, is now serving a 14 year sentence, having been convicted in 2006 on 19 counts of securities fraud, conspiracy, insider trading and lying to auditors.

Chairman Kenneth Lay was also found guilty on fraud charges but died that year.

Enron’s accountants, Arthur Andersen, were eventually dissolved after the discovery the firm had helped Enron hide losses in its subsidiaries. Several accountants were found to have overstated financial reports, cash flows and earnings.

US insolvency proceedings at Enron are ongoing.

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