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Furore over $260m contract on Usan oilfield

By Sulaimon Salau
24 February 2016   |   2:10 am
The last may not have been heard about the controversial award of the $260 million contract on Usan oil field by Esso Exploration and Production Nigeria Limited. In the latest development on the matter, the Nigerian Content Front (NCF) has called on the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu to cancel $260…

USAN FPSO

The last may not have been heard about the controversial award of the $260 million contract on Usan oil field by Esso Exploration and Production Nigeria Limited.

In the latest development on the matter, the Nigerian Content Front (NCF) has called on the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu to cancel $260 million contract, insisting that the award of the contract without open competitive bidding violates Section 16(1) (c) and (d) of the Public Procurement Act (PPA) of 2007 and is punishable under Section 58 (c) of the PPA.

The President-General, NCF, Ebikabowei Ezoukumor and the Secretary, Young Tari, in a jointly signed statement yesterday, lunched a threat to drag Esso and the National Petroleum Investment Management Services (NAPIMS), to the Economic and Financial Crimes Commission (EFCC) over the said contract, which was allegedly awarded without tendering process.

According to the group, NAPIMS, a subsidiary of NNPC had admitted that in October 2014, Esso being also the Operator of both Erha/Erha North fields (in Oil Mining Lease (OML) 133) and Usan Field (in OML 138) wrote a letter to NAPIMS requesting for engagement of a subsea intervention vessel (Maersk Nomad) operated by GMT Energy on Erha North field on a single-source basis.

It therefore, cited NNPC’s recent clarification that the then NAPIMS management reviewed Esso’s request and approved for two years firm plus one-year optional extension.

The Bayelsa-based group queried if it is a transparent procurement process for Esso to write to NAPIMS nominating a singular contractor and seeking approval from NAPIMS for a sole-sourced contract of millions of US Dollars to be awarded to this company without tendering.

“Does Esso’s internal procurement process permit such an action that is everything but fair and transparent? What was the criteria used by Esso to GMT Energy Services Limited to NAPIMS to provide the Subsea Intervention vessel Service? Is it their track record or experience in rendering such services or are there other self-serving motives?” it stated.

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