Reps summon Total, others over local content violation
By Taiwo Hassan GUARDIAN | June.29.2009

CITING an alleged breach of contract in line with the local content policy of the Federal Government, the House of Representatives Committee on Public Procurement may have summoned French oil firm, Total Upstream Nigeria Limited (TUPNL). The lawmakers want Total to explain why it withdrew a contract awarded to an indigenous oil service firm, Tilone Nigeria Limited.

According to a member of the House Committee on Public Procurement (Due Process) of the National Assembly, who spoke to The Guardian on the condition of anonymity yesterday, the committee has summoned the French oil firm to appear before it and clarify several issues raised in the petition against it by an indigenous company, specifically, to explain its role in the Remote Operated Vehicle (ROV) services for Akpo field development project, which according to him, was awarded to the Nigerian firm in an open pre-qualified bidding in January 2006.

He stated that the committee had received a petition from the Nigerian firm early this year, stating that TUPNL violated the local content policy by re-awarding the same contract to a Swiss firm, Oceaneering International AG, which it alleged had no legal entity in Nigeria and thus could not be awarded a contract under the laws of Nigeria.

He added that the committee summoned the French oil company and the Nigerian company to a meeting on February 3 this year, but to the surprise of the committee chairman, Total refused to turn up at the meeting.

In addition, the lawmaker stressed that TUPNL refused to award the contract to the local firm, after confirmation by the Nigerian National Petroleum Corporation (NNPC) that Tilone Nigeria Limited won the bid, after duly scrutinising the bid tender for the contract.

He frowned on the role played by the oil firm, stating that the company's action showed that it did not have respect for the lawmakers and the laws of the country.He, however, warned the oil firm that failure to appear during tomorrow's public hearing would trigger the wrath of the House members, adding that punitive action would be taken against the oil firm.

According to him, the local content policy is a scheme designed by the government to allow local firms to showcase their capability by participating fully in the development of the upstream sector of the nation's oil and gas industry. He said that the House of Representatives would not tolerate a situation whereby multinationals oil firm operating in the country deny local firms participation in the sector.

Speaking with the Managing Director of Tilone Nigeria Limited, Mr. Stanford Tassie at the weekend, he told The Guardian that the matter was before the National Assembly, adding that the company might adopt a legal action against TUPNL if it refused dialogue.

According to him, his company has met all the requirements for the contract, and openly bid for the ROV contract. He explained that his company submitted a technical tender, adding that the scope of supply for the contract included some drill ships (rigs) and vessels.

He, however, stated that the duration of the contract for the various drill ships ranged from two to seven years. Tassie noted that he discovered foul play when his company received an e-mail from TUPNL after five months of awarding the contract, informing them that the rig mobilisation and the commencement date of the ROVs had been shifted forward.

"We saw this action as a ploy to discourage us from continuing with the tender process. We responded that we will meet with the new schedule, while Subsea Seven, which successfully had passed the technical stage, declined to continue with the tender because of this mail from TUPNL," Tassie said.

While reacting on the matter, a senior official of TUPNL, who spoke on the condition of anonymity, told The Guardian yesterday that the company would appear before the House of Representatives at the public hearing to file its reports on the contract.

When asked on the allegations, he refused to comment, stressing that the Executive Director and Project Director of Akpo field, Francois Rafin, was in the right position to comment on the issue. He, however, said that TUPNL had respect for the Nigerian laws, and thus had been operating in a legal way since its entry into the Nigerian oil and gas industry.

Minister of State for Petroleum, Odein Ajumogobia inaugurated the Akpo field last month. The field has capacity for 185,000 barrels of oil and equivalent condensate.

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