NNPCL, TotalEnergies Put To Task Over Alleged Deal With Indicted US Company

Posted by African Examiner Business News, Featured, Latest Headlines Tuesday, June 20th, 2023

(AFRICAN EXAMINER) – An American company previously indicted for bribery in Nigeria has again been accused of collaborating with officials of the Nigerian National Petroleum Company, NNPCL and TotalEnergies in undermining Nigeria’s local content law and award of a contract for providing a drilling ship at $142k per day higher than that originally awarded.

South-South Reawakening Group, SSRG in a petition to the board of the Nigerian National Petroleum Corporation Limited, NNPCL observed that in December 2021, TotalEnergies issued a local company, PALMERON with Letter of Intent, after emerging as the lowest bidder and the only company with available drillship to meet TotalEnergies OML 130 deepwater drilling campaign planned for April 2022.

SSRG in the petition articulated by its national coordinator, Joseph Ambakaderimo observed that during the period this rig was available, oil price was above the price margin of $110 per barrel and countries all over the world were taking advantage of the high crude oil price, but sadly under the directive of a top official of NAPIMS, without regards to Local Content initiatives openly disregarded due process, cunningly delayed contract award to PALMERON, resulting in the country losing out in the benefits of the high crude price.

SSRG further claimed that the delay was to create room for the availability of Noble Corporation Drillship (Gerry de Souza) to complete a project in the Gulf of Mexico by December 2022. SSRG also gathered that Noble Corporation emerged the 4th lowest bidder in the commercial evaluation process. This delay cost Nigeria millions of dollars and opportunity for Nigeria to own a deepwater drillship.

NNPC and their partners specifically waited over 12 months for Noble Corporation Drillship a foreign drillship (Noble Gerry de Souza) availability to start a drilling campaign, when PALMERON presented five modern drillship of which one of the Drillship – (DVD) ex Bolette Dolphin was inspected and accepted by TotalEnergies in October and November 2021. A complete rig drill safe audit was also carried out by TotalEnergies personnel from France and was certified technically and readily fit for their drilling campaign planned for April 2022.

SSRG further asserted that PALMERON is the first indigenous company to win a competitive tender against multibillion dollars international companies that for many years had profited from Nigeria Oil and Gas operations deep offshore drilling campaign, without owning facilities in country as they focused on developing their own countries which is Europe, America etc.

While noting the past indictments of Noble Corporation in Nigeria and in America including The America Securities and Exchange Commission Vs. Noble Corporation, Case No. 4:10-cv-4336(S.D.Tex.) for which it paid $19.6 million in fines and another guilty plea for violating the Foreign Corrupt Practices Act (FCPA) over a bribery scheme in Nigeria, SSRG expressed outrage that the same company was now being used to undermine the country’s local content law.

Recalling the interactions between PALMERON and TotalEnergies following the bidding scheme won by the Nigerian company, SSRG said that the condition listed in the Letter of Intent that will precede award of the contract to PALMERON was closed out with enough time to meet TotalEnergies drilling campaign initially planned for April 2022.

SSRG further wrote:

“Following the Letter of Intent, TotalEnergies mandated PALMERON to sign a legally binding agreement with suitable technical partners and to ensure necessary steps are taken to make the drillship available for the planned drilling campaign scheduled for April 2022. Following TotalEnergies instructions, PALMERON entered into contract which exposed the indigenous company to hundreds of millions of dollars, in addition, over $3 million was spent monthly for the reactivation and maintaining the drillship for TotalEnergies OML 130 contract from December 2021 to March 2023. In March 2022, TotalEnergies asked PALMERON to make some modifications on the Drillship BOP this activity also cost time and money.

“TotalEnergies promised an award letter will be issued within 7 days of meeting the conditions listed above. All the conditions required for contract award was fulfilled by PALMERON while TotalEnergies continued to promise PALMERON every other month that the contract will be awarded.

“The fraudulent award of the contract to Noble Corporation satisfied the selfish interest of some few who are hostile to Nigeria gradual dominance in the deep-water industry thereby short-changing the Nigeria economy.

“PALMERON petition to GMD of NNPCL was not investigated, instead the petition was leaked to TIREX (a company allegedly being fronted by a top NNPC official) who decided to publish PALMERON confidential petition on national newspaper and also to sue PALMERON for making a formal complaint to the GMD and NNPCL Board about procurement irregularities which complaint about TIREX/NAPIMS relationship and involvement in the OML 130 drilling campaign.”

In the petition to the NNPC board, the SSRG asserted:

“We are curious to know the positions of the NNPCL board on this matter. Was there any investigation carried out when these issues were raised? These fraudulent patterns and intentional negligence by NNPCL if not controlled will continue to put the country’s oil and gas operational cost on the increase and consequently erode the nations share in the profit.

“The fraudulent award of the contract to Noble Corporation and their Nigerian partners surely gratified the selfish interest of some few who are hostile to Nigeria gradual dominance in the deep-water industry thereby short-changing the Nigeria economy and development. it is obvious that the contract under the guise as a stop gap, was awarded to same company the falsified commercial re-evaluation was carried out to favour and drilling operations delayed.

“The Letter of Intent issued to PALMERON was never withdrawn or cancelled before TotalEnergies initiated a Stop Gap process that led to awarding the contract to Noble Corporation.

“On the same OML 130 drilling tender that you already signed off a winner to use a Stop- Gap to award to a competitor is a criminal offence and fraudulent.

“The ruling itself from the judge on the 19th of January is sufficient to suspend all those involved while proper investigation is carried out on the abuse of power.”