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Court orders Samsung to remove electric fence around LADOL

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Lagos High Court sitting in Igbosere has ordered Samsung Heavy Industries (SHI) of South Korea to remove the barricade and the electric fence it erected around the facility of Lagos Deep Offshore Logistics (LADOL) within seven days.

The trial judge, Justice Abdulfattah Lawal, while delivering the ruling, directed LADOL to continue to supply electricity and water to its tenants (Samsung) and not to evict them pending the delivery of judgement on the substantive suit on January 25, 2019.

SHI had on November 27, 2018 blocked three entrance gates to the LADOL fabrication and integration yard with 32-tonne blocks piled three feet high, while the remaining access gate was blocked with a crane.

The perimeter fence around the yard now bears ‘Danger/1100v/High voltage/Gas Area/Explosion Hazard/Keep off”.

Port users interpret the sign as indicating that Samsung electrified the fence.

Earlier, the judge had refused to grant Samsung an interim injunction to challenge the termination of the lease agreement it had with LADOL.

The South Korean firm and LADOL had gone into partnership as main contractor and local content partners respectively for the procurement, construction and commissioning of the $3.3 billion Floating Production Storage Offloading (FPSO) for the Egina deep water oil field, operated by Total, on behalf of itself and partners.

Part of the terms of the contract as set out by the Nigerian Content Development Monitoring Board (NCDMB) was the upgrading of LADOL’s fabrication yard and quay, a requirement targeted at providing and enhancing local content.

The partnership ran into crisis following LADOL’s alleged discovery that contrary to Samsung’s claim that it invested $300 million in the fabrication yard upgrade, Total allegedly paid $214 million to Samsung for the job.

This turn of events made Samsung a contactor in the upgrade of the facility and not an investor as it had claimed. This development, which apparently had shortchanged LADOL, whittling down its stake in the equity from 70 per cent to 30 per cent, led to more crises and shook LADOL’s confidence in the arrangement.

Samsung might have further complicated matters with its move to get the cost of rent of LADOL’s facility reviewed downward by engaging the Nigerian Ports Authority (NPC) in direct negotiation to that effect, contrary to the terms of the agreement between the two partners.

LADOL at the expiry of the sub-lease in June 2018, granted the partnership a two-month extension to enable Samsung complete its work on the Egina FPSO, rather than a renewal.

When the extension of the operating licence expired on September 2, 2018, about six days after, the Egina FPSO sailed away to Egina field.

However, with Total’s intervention on behalf of Samsung, LADOL has allowed Samsung staff to enter the zone to carry out some works, thus ensuring no loss to Nigeria.

This was the situation until last Tuesday when Samsung, to the surprise of both Total, its client, and LADOL, its estranged local content partner, went ahead to erect the barricade and the electric fence.


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