TFP Surveillance Contract and NNPC’s new footing
The Nigerian National Petroleum Corporation (NNPC), which manages the nation’s oil and gas sector assets and oversees the strategic industry’s governance, is currently deploying specific and far more circumspect measures to end the hemorrhage of huge funds, contrived by dodgy operators and their devious co-travelers. This is clearly in sync with the present federal administration’s prudent governance vision.
It could be recalled that recently, the NNPC proposed to re-award the Trans Forcados Pipeline (TFP) surveillance contract to Ocean Marine Solutions (OMS) Limited. After the Bonny Oil Pipeline System, the Trans Forcados Pipeline is the second largest network in the Niger Delta, a vital piece of Nigeria’s oil sector infrastructure, capable of transporting 200,000 to 240,000 barrels of oil per day – equivalent to 14% of Nigeria’s daily production.
The TFP is the key to transporting crude oil from some of Nigeria’s largest and most prolific fields and it is, therefore, of fundamental national strategic importance. The surveillance contract to OMS followed due process, devoid of any underhand or shadowy manoeuvres. In an industry, often seen as opaque, the award was transparent, bereft of any illicit deals and actually showcases the new face of NNPC.
Although, OMS is yet to sign the contract (and it certainly will do), the former contractor which NNPC dropped, Eraskorp Nigeria Limited, in cahoots with Shoreline Natural Resources Limited, have kicked, alleging that due process was not followed and curiously claiming opacity in the re-award of the contract to OMS. Despite NNPC’s statement on the TFP contract, spelling out the rationale for withdrawing the contract from Eraskorp and re-awarding it to OMS, Eraskorp and its promoters have moved against both OMS and the NNPC.
This expository intervention would have been unnecessary if Eraskorp/Shoreline Natural Resources Limited had confined their unfounded tantrums onshore. They did not. They internationalized the fight, using their connections with lending institutions in the US, Netherlands and Switzerland to try to frustrate and sabotage the proposed contract to OMS and smear NNPC. This is clearly despite the inefficient surveillance by Eraskorp that led to breaches on the pipeline and loss of 11 million barrels of crude (equivalent to $800m) in 2018.
Not surprisingly, the emerging new NNPC could no longer accommodate such contrived monumental losses by dodgy industry players. This clarifies the re-award of the contract to OMS, which had recorded a success story on the Warri-Escravos-Bonny-Port Harcourt pipeline under the proof of concept arrangement. Significantly, in the contract being proposed to OMS, there is a clause that binds the company to underwrite the NNPC for any breach on the pipeline. Under this new template, the OMS will, in effect, pay for any repairs.
The stridency, nuances and Machiavellian slant of Eraskorp/Shoreline Natural Resources Limited grudge offensive against both OMS and NNPC hint at a dark, desperate agenda unworthy of industry players who ought to see Nigeria’s economic emancipation as critical priority.
In terms of industry profile, Shoreline/Eraskorp can hardly hold a candle to OMS. Cut to the bone, NNPC’s re-award of TFP spawned the puzzling, crude smear attacks by Eraskorp/Shoreline against OMS and by extension – NNPC. The duo have even carried this vendetta into newspaper advertorials.
Reacting to what it correctly sees as outrageous, untrue, defamatory allegations being thrown round about its operations, the OMS recalls the genesis of its business relationship with NNPC, saying it wormed its way into the heart of the corporation after it successfully revamped and rehabilitated the Escravos-Warri Pipeline. The Corporation thereafter approached it to replicate the achievement on the Bonny-Port Harcourt pipeline.
According to OMS, “Our efforts led to the formal re-commissioning of those pipelines on 22 and 23 April 2016 by the Minister of State, Petroleum Resources, and the immediate past Group Managing Director, NNPC. Since April 2016, we have delivered 60,177,843 barrels of oil (and counting) to both refineries without any loss to the nation.”
Significantly, OMS did not seek out the TFP security and surveillance contract. The NNPC approached it to render services because of the dire security situation and because of the company’s reputation for delivering results. Eraskorp was the erstwhile contractor in charge of surveillance and security of the TFP. But it was under its watch that the TFP reportedly suffered huge crude oil losses of over 11 million barrels on the line and 60 days downtime (a value of $800million) due to the TFP’s vulnerability and several illegal valve insertions from which oil thieves and vandals conducted their nefarious activities.
That essentially triggered an angered NNPC’s severance of its relationship with Eraskorp. Over all, the decision to reassign the TFP surveillance package to OMS was reached after consideration of the huge losses on TFP and rigorous appraisal of the company’s impressive record of performance on the Bonny-Port Harcourt and Warri-Escravos Crude Oil evacuation lines.
However, in what the OMS described as a desperate quest to malign and create public disaffection against it, Eraskorp alleged that the NNPC awarded and re-awarded several surveillance and security contracts to the company for a total sum of $9.9 million per month. According to OMS, “This assertion was not only a fallacy but also a deliberate misrepresentation of facts as OMS currently manages and is in contract only on the Escravos-Warri and Bonny-Port Harcourt pipelines.”
As it were, successive contrived allegations against OMS by the duo of Shoreline/Eraskorp have foundered on the shore of facts. The allegation that the security contract for TFP was awarded to OMS against the wise counsel of all stakeholders in OML 30, the JV Partners, Operators and 111 communities in the oil field, failed woefully in their mischievous objective of rubbishing OMS and NNPC.
Besides, the deployment structure, scope, terms and conditions of the proposed contract to OMS differs in all ramifications to that of the Eraskorp agreement. Good a thing, the NNPC itself has publicly declared that there is nothing illegal in respect of the security contracts awarded to OMS for the provision of security and maintenance services for the Escravos-Warri and Bonny-Port Harcourt pipelines. According to the NNPC, “It is pertinent to note that the TFP contract is not subject to the provisions of the Public Procurement Act (PPA) 2017 by virtue of Section 15 (1) (b) of the PPA.”
OMS, on its part, insisted that, “All our contracts from the IOCs and NPDC (NNPC) have fully followed the due process in line with international competitive bidding; the “Proof of Concept” or “The Cure and Pay” model which has been our modus operandi and hardly found in the oil and gas industry, creating uncommon values for clients.”
Interestingly, OMS stated that when Captain Hosa Okunbo, the company’s visionary founder, turned down several requests from Shoreline’s Kola Karim to meet with him on behalf of Eraskorp’s Maxwell Okoh and Morris Idiovwa, they ratcheted up their smear vendetta. In the circumstance of the burgeoning hostilities over the TFP security contract, it is important that the federal government directs its relevant agencies to probe the activities of Eraskorp and Shoreline prior to the termination of the previous contract and allied issues that verge on economic sabotage to the nation.
· Mr. Momodu contributed this piece from Auchi through email@example.com