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Author Name: Ifeanyi Izeze
Number of articles: 174

Before the current Petroleum Minister, Mrs Diezani Allison Madueke is allowed to go, she and her... (0) Comment



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Oil: Agip’s Breaching Of Nigerian Content Act And Serious Matters Arising?
Author: Ifeanyi Izeze | October 28, 2014



Ordinarily, the argument by the Nigerian subsidiary of the Italian transnational oil company, ENI, in its dispute with the Nigerian National Petroleum Corporation (NNPC) and its investment subsidiary, the NAPIMS would have been taken as a damage control measure by the Italians, if not that the company has continued its stealthily roguish adventures. How come that in what could best be described as blatant disregard of the directive from the NNPC and its investment subsidiary- the NAPIMS, the Nigerian Agip Oil Company (NAOC) has continued with its impunity as though the nation's apex oil concern takes orders from the Italian firm? Who is the bigger partner in the joint venture- Agip or NNPC? Who takes directives from whom, at least in accordance with the share -holding strength? How did Nigeria get to this point that all sorts of people particularly foreigners take us for a ride? The NNPC had serially reiterated in strong terms, its unwillingness to support any cost expended on Agip's maintenance services of the OB/OB, Ebocha and Kwale Gas Plants arising from services provided by Plantgeria, but Agip has continued with its impunity and flagrant abuse of this directive. The question is: Does NAOC expect the NNPC to pay part of what the Italian firm is expending contrary to the directive from the bigger partner in the joint venture? Agip's several reasons for stalling the NAPIMS' directives in this matter could best be described as untenable and mischievous because the Stop-Gap contract in question is not an open tender process. Therefore the reference to the integrity of the replacement contract procurement process is deceptive. How could Agip not know that the Stop-Gap and the replacement contracts are distinctive activities that belong to different phases of the service? So it was a calculated deception by NAOC to draw a conclusion that there will be legal issues with other Replacement contract bidders. The issue of litigation between GEION (General Electric) and Arco, (the wholly Nigerian company) if the Stop-Gap contract is awarded to the Nigerian firm is an unacceptable dummy as it failed to appreciate that the original contract has since expired. The Stop-Gap is a new and independent contract and any new relationship between GEION and Arco will be at the instance of ARCO Is it not spurious for Agip to smuggle in the issue of higher cost for the Stop-Gap contract into the argument? It would have been clear to the Italian operator that the comparison of the Stop-Gap cost should be against the prevailing month-on-month Purchase Order cost not the replacement contract whose tendering is still, at best, inconclusive. In the Purchase Order, Agip has been paying USD425, 980.58 (Four Hundred Thousand, Nine Hundred and Eighty and Fifty Eight Dollars) for every two days and this has been running since February 4th 2013. The Purchase Order arrangement between NAOC which is not backed by the Law of this Land, has led to the payment of over US$182 million (One Hundred and Eighty Two Million United States Dollars) or about N29.5 billion (Twenty Nine Billion and Five Hundred Million) without recourse to joint venture appropriation and approval. Meanwhile the contract the Italians have refused to sign with the Nigerian firm, Arco stands at about $40 million per annum for the same job. So what cost is Agip talking about? Is this not an outright provocation of Nigerians especially when the issue is not about technical competence of the Nigerian firm? Dangling Plantgeria Nigeria Limited as a local content replacement of Arco in the maintenance service contract of the OB/OB, Ebocha and Kwale Gas Plants was a deliberate dummy by Agip to obfuscate issues in the dispute and cause more confusion so that the Italian transnational and its American globalisation ally can continue to defraud the NNPC in the joint venture under the guise of GEION being the technical partner in the Plantgeria contract. There is so much deceit by NAOC in this matter which ordinarily would have been resolved long ago. For instance, Agip's representative at a meeting convened by the Department of Petroleum Resources (DPR) on Thursday 24th August 2014, told the gathering that “no letter of offer for a Stop-gap or interim contract had been issued to Plantgeria, the company NAOC claimed was the winner of the bid for the ‘4+1' replacement contract. Meanwhile, Plantgeria Company Limited in its advertorial published in The Guardian newspaper of Monday 25th August, 2014 said it had received a letter of “Interim Agreement” from NAOC. So who do they expect us to believe in these contradictory public statements? It is ridiculous that Plantgeria in its newspaper advertorial could cite the “fairness or transparency of the selection process” that threw it up as the bid winner. What transparency and fairness does the company mean? Can Plantgeria tell Nigerians the actual position of its bid in terms of cost effectiveness and technical capability if that is the argument they want push? From the wuru bid arranged by Agip and GEION, Plantgeria came last in terms of technical qualification for the job and in terms of cost-effectiveness, the company came fourth. The question is if the selection was to be assumed to have been based on saving cost, what happened to the first, second and third other more cost-effective bidders before Plantgeria? You see the deceit? How could Plantgeria have met the local content criteria in a gas plant services operation when in the first instance, the company was registered to provide vehicle rental and maintenance services to oil companies? Plantgeria in its advertorial of Monday 25th August 2014 in a national daily posited that the company has existing contracts with Shell, Total, ExxonMobil, NPDC,NLNG, Schlumberger among other companies. That is true. But the company failed to disclose that none of those contracts has anything to do with servicing of rotating equipment machines including turbines. Almost everybody that had anything to do with the oil industry in Port Harcourt including myself, knows that Plantgeria is the company located at Plot 278 Trans-Amadi Layout, Port Harcourt, River State. From day one till today, the company has been involved in servicing the operational needs of oil companies by supplying serviced operational vehicles complete with drivers. It also supplies air conditioners, generators, forklifts, Christmas trees, caterpillars and heavy-duty vehicles on lease to clients. So when did this company that was incorporated as a logistics service provider metamorphosed into a rotating equipment machine maintenance specialty? This is the dubiousness in the Agip's push to smuggle Plantgeria on the local content argument to undermine the NNPC/NAPIMS and displace Arco, the Nigerian firm. Truth be told, Plantgeria Nigeria Limited is an Italian company with a retired Army General from the north and his younger brother as Nigerian partners. In essence, since Plantgeria has zero technical capacity to handle any gas turbine repairs or servicing job, but because of its global alliance with General Electric, Agip invariable wants to bring in Plantgeria as a cover to continue servicing its anti-Nigerian content bond with General Electric in their global alliance. How can we as a country allow these foreign operators covertly drain the nation of such huge amount of money with impunity? Are these companies above the laws of this land? IFEANYI IZEZE lives in Abuja: iizeze@yahoo.com; 234-803-304-3009)

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