18 January 2018

Nigeria: House Orders Napims to Re-Award U.S.$260 M Contract to Nigerian Company

Abuja — The House of Representatives wednesday directed the National Petroleum Investment Management Services (NAPIMS) to re- award a $260 million contract to a Nigerian Company, Tilone Subsea Limited.

The House also ordered the Esso Exploration and Production Nigeria Limited (an ExxonMobil subsidiary) to mobilise Tilone Subsea Limited to provide OIMR Vessel and WROV Services to meet its requirement for Usan operations in Oil Mining Lease, OML 138.

The resolution of the lower chamber followed the outcome of an investigation which resulted from a motion referred to the House Committees on Petroleum (Upstream) and Public Procurement in February 2016.

The House has alleged that the $260 million contract awarded by NAPIMS, a subsidiary of the Nigerian National Petroleum Corporation (NNPC) was in violation of due process and without approval from both the NNPC's board and the Corporation's Group Executive Committee (GEC).

NAPIMS allegedly fraudulently granted approval for ESSO Exploration and Production Nigeria Limited, a subsidiary of ExxonMobil, to award four single source contracts for projects in Exxonmobil's Usan Deepwater Project, at a total value of $260 million without any form of tendering process.

Also, NAPIMS allegedly through three memos, dated October 13, 2014; February 10, 2015 and April 16, 2015, single handedly nominated four companies to execute the contracts.

However, at the conclusion of its probe, Committees on Petroleum Resources (Upstream), and Public Procurement chaired by Hon. Victor Nwokolo on December 20, 2017 laid its report on the House floor.

The report was subsequently considered and adopted by the green chamber wednesday.

It recommended among other things that "... NNPC and its Joint Venture Partners to always adhere to due process in their transactions to eliminate prolong disputes that may negatively impact on investments.

"Given that since the contract for the provision of the DP2-DP3 Construction Platform Support Vessel single sourced to GMT Energy Limited is already ongoing, the Contractor should be given enough termination notice by demobilising it at a ate not later than the first year anniversary of the commencement date of the contract.

"That given both the Nigerian content human capital development and financial investment already made by Tilone Subsea Limited,mother committee recommends that the NNPC Board do approve the NAPIMS memorandum of 30 December,2013 which cleared NAPIMS Contract Review Committee on 10 July, 2014 referenced A10-190614 for the provision of OIMR Vessel and WROV for Usan operations in OML 138;

"That EEPNL should mobilize Tilone Subsea Limited to provide OIMR Vessel and WROV Sercices to meet its requirement after the demobilisation of GMT Energy Limited.

Other preliminary investigation had exposed fragrant violation of due process by the NNPC's board.

Trouble started when the contract for the Provision of four remotely Operated Underwater Vehicles (WROVs) on the AKPO field in OML 140 was initiated in the year 2006 when the drilling campaign on the AKPO field was ongoing and the competitive contract was won by Tilone.

But, TUPNI (Contractor on OML 140) disregarded NNPC's directive given in a letter NAP/GGM/A-6711/02.08 dated April 25, 2007 to award the contract for Provision of the ROVs on AKPO field to Messrs. Tilone, but instead awarded the contract to Oceaneering Nigeria Limited.

Nigeria

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