The Nigerian Content Development and Monitoring Board has faulted Total Upstream Nigeria Limited and Samsung Heavy Industries over non-compliance with the Nigerian Content Act in the development of the $15bn Egina deepwater field off Nigeria.
The NCDMB, in a letter addressed to the Managing Director, Total Upstream Nigeria Limited, Mr. Christophe de Margerie, said the work scope for the fabrication and integration package in the Egina field development was not compliant with the Nigerian Content Act.
Commenting on the project’s prospects for Nigerian content development, Margerie had recently said, “The Egina project calls for 44 wells connected to a 330-metre long Floating, Production, Storage and Offloading vessel, which can store 2.3 million barrels. Locally worked hours will reach about 75 per cent for Egina as part of a plan to boost local content of Nigerian projects.”
The local content board, however, expressed concerns that Total and Samsung had disregarded the local content provisions, adding that this would most likely lead to cost overrun and time delay.
The letter noted that SHI’s proposal to use the Lagos Deep Offshore Logistics Base facility for the fabrication of 10,000 metric tonnes would lead to flooding the yard with expatriates.
“The Board cannot rely on assumptions and projections made by SHI,” the letter read in part.
The NCDMB also noted that two years after it highlighted the risk of the Nigerian Ports Authority not granting approval and six months after SHI was selected as the successful bidder for the engineering, procurement and construction contract, the approval had still not been obtained for the use of the LADOL facility for fabrication purposes.
The board also pointed out that the recommendation to award the RTA for SHI could not meet the man-hour target for fabrication and integration set by it to meet the employment provisions in the Act.
While noting the preference of SHI and Total’s proposal for awarding the Egina FPSO contract package, the board said it was unable to support the latter’s proposal “after noting that three critical statutory approvals have not been obtained from the NPA.”