LADOL-Samsung feud a potential threat to FDI

The ongoing war of attrition between Lagos Deep Offshore Logistic Base (LADOL) and Samsung Heavy Industries Nigeria, if not well managed will erode investors’ confidence in Nigeria and dash any hope of further investment in FPSOs.

The Egina FPSO is not the first FPSO to be deployed in Nigeria’s oil and gas industry as the country currently has 14 FPSOs, all built in foreign yards. The uniqueness of the Egina FPSO lies in the fact that apart from being the largest FPSO in Nigeria, it will also be the first FPSO to be fabricated and integrated locally in Nigeria, and across the African continent. Following the stellar work done by SHI, the FPSO arrived in Nigeria early this year and sailed off late August this year. However, the partnership between LADOL and Samsung has since soured.

Following the bitter disagreement, Global Resources Management Limited (GRML), a subsidiary of LADOL, on September 5th this year, terminated SHI MCI FZE’s sublease. The development deepened the disagreement between the parties, raising concerns around breach of contracts. Samsung was as a result, denied access to the fabrication yard, putting the FPSO in Danger.

The Managing Director of Samsung Heavy Industries Nigeria (SHIN) Limited, the parent company of SHI MCI FZE, Mr. Yong-ho Jo, stated that the denial of SHIN workers access might delay the December 2018 first oil for the 200,000 barrels per day Egina deepwater field. He, however, assured that Samsung would do everything humanly possible to ensure that Total achieves its December target for first crude oil from the field.

Source: THIS DAY

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