HOUSTON- Samsung, the Korean Ship builder, engineering, procurement and construction giant appears to have been endorsed by the group executive committee, GEC, of the Nigerian National Petroleum Corporation, NNPC, for execution of the Egina Floating, Production, Storage and Offloading, FPSO, vessel in what appears to be questionable circumstances.

Egina oil field is a $15 billion project development being promoted by Total, the French oil giant in partnership with the NNPC, on behalf of the Nigerian government.

An international bids tender process for the Egina project, superintended by NAPIMS, the NNPC investment arm; the Department of Petroleum Resources, DPR; the Nigerian Content Development and Monitoring Board, NCDMB; and Total had seen the emergence of Hyundai Heavy Industries, HHI, to handle the FPSO packages valued between $3.5 billion – $4 billion.

NAPIMS had consequently forwarded the name of HHI as the preferred bidder for the FPSO packages to the NNPC for GEC consideration.

It was gathered that in a meeting which took place after a GEC meeting held a few days before Christmas, Mr. Andrew Yakubu, the NNPC group managing director, Abiye Membere, the NNPC group executive director and Mr. Tony Madichie, the NNPC secretary and legal adviser, decided to award Samsung the FPSO package.

Although we gathered that Samsung gave a 5 per cent discount on the bid advanced by HHI, the company did not participate in the initial bids tender exercise, neither was it recommended by the superintending authorities.

Repeated phone calls including a text message to Mr. Membere for clarification proved abortive. Similarly, phone calls to Mr. Yakubu to obtain clarification were not answered.

While the development runs against the grain of due process, checks revealed that, Samsung has never executed any project in Nigeria neither does it have any presence in the country.

Further checks revealed that the Egina project has a 51 months execution timeline, and it will take anywhere between 4 and 5 years for Samsung to construct a facility in Nigeria to execute the Egina FPSO package.

Although officials of Total refused to be quoted, those who spoke on condition of anonymity referred us to a letter the company had written to the NNPC insisting on sticking to due process.

“The NNPC management must either stick to due process or forget about this project. Already, the way and manner they have gone about this, exposes all those involved to investigation by the government of the UK under the anti-bribery law and the US Security and Exchange Commission, SEC, over possible contravention of the Foreign Corrupt Practices Act, FCPA,” the lady noted.

“It is now obvious that the so called effort to save Nigeria money has been a ruse all along to smuggle in Samsung to handle the FPSO package. If indeed, the NNPC management had altruistic motive, why didn’t they ask HHI to reduce their bid by 5 per cent?

This is a very strange approach to doing business; we have never witnessed anything like this before, and we are afraid that the fallout could have very negative consequences for the image of the corporation and the government.”

Shortly after Mr. Abiye Membere, was appointed group executive director in charge of exploration and production, and his predecessor, Mr. Andrew Yakubu was elevated to the position of Group Managing Director, management of the corporation, they decided that all the projects which had been sent for GEC consideration were too pricey.

http://biztellers.com/2013/01/nnpc-in-questionable-egina-fpso-award-to-samsung/

For those of us working in the Oil and Gas sector...What is your opinion on this matter?

http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=109357:samsung-may-upstage-total-to-clinch-egina-fpso-deal-&catid=31:business&Itemid=562

Reports had it that National Petroleum Investment Management Services (NAPIMS) had consequently forwarded the name of Hyundai Heavy Industries as the preferred bidder for the FPSO package to the NNPC for consideration but somehow NNPC decided to award Samsung the contract because of a 5% discount.
The One million dollar question is why didn't NNPC ask Hyundai Heavy Industries to give them a 5% discount?

NNPC Selection of Samsung for Egina FPSO not final – HHI


South Korean engineering firm Hyundai Heavy Industries (HHI) has said a final decision on the award of a floating production, storage and offloading vessel contract for the Egina deepwater oil field offshore Nigeria had not yet been made despite the provisional award of the contract to rival Samsung by the NNPC management.

It was gathered that the NNPC Board, chaired by Diezani Alison-Madueke, the minister of petroleum was expected to meet on Monday 7th January 2013 to take a final decision on the award.

HHI said it was keeping a close eye on developments surrounding the award of the contract, which had originally been earmarked for award to HHI.

“The final decision has not been made yet,” an official at HHI said Friday.

“HHI was picked as a preferred bidder for the Egina project deemed significant to us,” he said.

Samsung declined to comment Friday.

France’s Total, the operator of the field and state-owned Nigerian National Petroleum Corp. are currently in dispute over the award of the FPSO contract to Samsung after it was originally awarded to HHI.

Sources have told Platts that a team of officials from Total and NNPC subsidiary the National Petroleum Investment Management Services in late December approved the award of the FPSO contract to HHI for $3.8 billion, but NNPC chose Samsung whose bid was 5% less than the approved cost.

NNPC said in mid-December that further development plans on the Egina field, along with the Erha North deep offshore field operated by ExxonMobil, were on hold to allow for a comprehensive review of the economics.

Sources close to the project said the review would end up hampering progress on developing the highly prospective field.

Egina, Total’s third deep offshore development in Nigeria, lies in OML 130 and near the Akpo field.

Total, which holds 24% equity in the field, began putting in place plans to commence drilling at Egina late last year, with a 2014 target date for the start of production.

The Egina field is expected to reach peak production of 150,000 b/d.

http://www.thepetropro.com/news/nigerian-news/nnpc-selection-samsung-egina-fpso-not-final-%E2%80%93-hhi


We are on stand-by and waiting for the outcome

How long is this drama gonna last? They claim to want to save money for the country by choosing SHI. Or are they just making sure they get something enormous for their own pockets out of this massive project?

It's really sad that individuals at the top put their personal gain in front of promptly encouraging massive investment.

What I'm still not sure is, what is the problem with giving Samsung the contract? I mean, these IOC's know our govt is corrupt in every way. So if they decide SHI will do the job, why don't Total take that as a result and move on since they have done their part right?

Area_boy: How long is this drama gonna last? They claim to want to save money for the country by choosing SHI. Or are they just making sure they get something enormous for their own pockets out of this massive project?

It's really sad that individuals at the top put their personal gain in front of promptly encouraging massive investment.

What I'm still not sure is, what is the problem with giving Samsung the contract? I mean, these IOC's know our govt is corrupt in every way. So if they decide SHI will do the job, why don't Total take that as a result and move on since they have done their part right?

Based on the Nigerian Content Law, I think HHI had an upper hedge,that was why they were the preferred bidder.
However,some greedy Nigerian Politician felt they aren't gonna benefit from it in terms of money(Niaja way nah),so decided to force Samsung on Total. What they need to do is set up a local company as the Local partner for Samsung.bty HHI already has a registrated entity in Nigeria.I know they have a base in Bayelsa.
The bottom line is that the powers that be are causing this wahala because of their personal gain.

I've been down with a terrible flu and out of commission for days now . posting this via mobile so will be short. Any new development on this project? I cant seem to find any fresh news anywhere

on serious issues Nigerian youths cannot comment, on useless post they show their ignorance. HHI already have plans to fabricate sections of the FPSO here creating jobs for thousand of people. Greedy i.d.o.ts in position of authority are thinking of their pockets only.