Lagos — Nigerian contractors have lamented the contracting guidelines posted by the Shell Petroleum Development Company of Nigeria Limited for the pre-FEED and FEED of the HA field development, noting that it is designed to preclude local firms from effective participation.
A memo made available to local contractors for the $1.6 billion HA field development stipulated that prospective contractors must have executed construction contract involving similar scope with a value of at least $900 million.
They (contractors) must “provide experience in the last five years in the management of minimum of two multi-disciplinary construction contract involving a similar executed scope (15m – 200m offshore water depth) carried out in the Niger Delta or similar environment, with a value of $900 million. This shall entail details of actual project value, clients and reference contracts,” a confidential Shell memo regarding the HA field development disclosed.
The local contractors noted that there are no Nigerian contractors with such experience, adding that as if this was not bad enough, the tender guidelines further stipulated that prospective contractors should provide confirmation letters from their financial institutions for short term financing of up to $900 million.
A local contractor lamented: “Confirmation letter from all financial institutions that have provided short term financing to the supplier up to $900 million and details of existing third-party loans or guarantees (if any).
“There are no Nigerian financial institutions capable of providing such financial facility at the moment and stipulating such terms amount to precluding Nigerian firms from participation”.
“In the joint evaluation team made up of 29 people, Shell nominated 27 people while the NNPC nominated only 2 people who were eventually stampeded into signing the contract.
“The way and manner Shell has gone about this does not serve the interests of either the Nigerian people or the economy.” yet another contractor noted.
The HA field is located in SPDC’s shallow offshore acreage OML 77, approximately 20 km south of the eastern Niger Delta coastline. The project offers the opportunity to develop and competitively monetise the field. The water depth in the field is approximately 17 metres.
The base concept for the HA field is development of 3 gas wells and 6 oil wells. The gas wells target three reservoirs while the oil wells target on oil rim and 3 oil bearing reservoirs. The surface development concept being considered consists of a main Processing Platform, PP, located in HA field in 17m of water depth, with capacity for 250MM scf/d, 40,000 barrels of oil per day gross liquids and 30,000 barrels peak oil of condensate rates.