Group wants Kachikwu to cancel $260m Usan oilfield deal

*Usan deepwater oil field.

*Usan deepwater oil field.

Oscarline Onwuemenyi

23 February 2016, Sweetcrude, Abuja – Some stakeholders in the Nigerian oil and gas industry have urged the Federal Government to cancel the $260 million Usan oil field contract awarded to ExxonMobil.

The stakeholders, under the aegis of Nigerian Content Front, NCF, specifically requested the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, to suspend the multi-billion naira deal, which was awarded by ExxonMobil’s Esso Exploration and Production Nigeria Limited.

NCF in a document made available to our correspondent in Abuja and signed by its President-General Chief Ebikabowei Ezoukumor and Secretary, Mr. Young Tari, alleged that the award of the contract without any open competitive bidding contravenes Section 16(1) (c) and (d) of the Public Procurement Act, PPA, of 2007 and is punishable under Section 58 (c) of the PPA.

The group equally reiterated its earlier threat to drag Esso and the National Petroleum Investment Management Services, NAPIMS, a subsidiary of the NNPC, to the Economic and Financial Crimes Commission, EFCC, over the said contract, which was allegedly awarded without tendering process.

While lauding the anti-corruption stance of Buhari and Kachikwu, it, however, noted that NAPIMS admitted in October 2014 that Esso being the operator of Erha North fields (in Oil Mining Lease (OML) 133) and Usan Field (in OML 138) wrote a letter to NAPIMS requesting for engagement of a subsea intervention vessel (Maersk Nomad) operated by GMT Energy on Erha North field, on a single-source basis.

But NNPC however, said the contract for Subsea Intervention Vessel single-sources to GMT (Mearsk Nomad) was not approved by it.

The corporation, in a recent clarification on the issue, said some of the controversies associated with the contract predated the current management of NNPC as well as the management of NAPIMS, its corporate services unit.

The group cited NNPC’s recent clarification that the then NAPIMS management reviewed Esso’s request and approved for two years term plus one year optional extension.

“We want to know if it is a transparent procurement process for Esso to write to NAPIMS nominating a single contractor and seeking approval from NAPIMS for a sole-sourced contract of millions of US dollars to be awarded to this company without tendering it requested.”

On the claim by Esso that Maersk Nomad was contracted at a lower cost than the re-negotiated rate for the BE802 Vessel, which Esso claimed that a saving of $1.2 million would be realised over a two year period with Maersk Nomad vessel, the group alleged that Esso never contacted the bona fide contractor handling the project to re-negotiate the contract for the one year extension from January 2016 – January 2017 contracting period.

NCF claimed that the last negotiation that was done with the contractor was for the contracting period ending January 2016.
On the claim by NAPIMS that the contract for Subsea Intervention Vessel single-sourced to GMT (Maersk Nomad) was not approved by NNPC, the Bayelsa-based group argued that “if the contract was not approved by NNPC, why the former NAPIMS Management did went ahead communicating their approval to Esso to award the contract to GMT Energy Resources Limited? It behoves on the new NAPIMS management to address the illegality by communicating to Esso and subsequently withdrawing its approval and not perpetuating illegality by condoning the illegal actions of the former management.”

The group also requested an explanation from NAPIMS on the issue of three different memos with the same reference number of NAP/PSC/MM/07.01, but dated October 13, 2014, February 10, 2015, and October 16, 2015, conveying approval for the project.

“This has further indicated that all three memos did not go through a secretariat or document register in NAPIMS and confirms that someone in NAPIMS just sat on his desk, typed and signed these memos that were sent to Esso /Exxonmobil),” the group affirmed.

The group also stated that NNPC in its defence did not refute this allegation, but rather claimed that it was an action by the last NAPIMS management.

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