FG Stops Seplat’s Project over Alleged Violation of Nigerian Content Law

•Issues notice of non-compliance to Amni Petroleum

•Seplat denies executing any contracts

By Ejiofor Alike

The federal government through the Nigerian Content Development and Monitoring Board (NCDMB) has directed Seplat Petroleum Development Company Plc to suspend work on its ANOH Gas Plant project in Oil Mining Lease (OML) 53 over alleged violation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010 by using a UAE firm for the engineering and fabrication, THISDAY has learnt.

THISDAY gathered that Jisike oil field is currently the only producing field in OML 53, which is located onshore in Imo State in the North eastern Niger Delta, approximately 60 kilomtres north of Port Harcourt.

However, OML 53 also contains the large undeveloped Ohaji South gas and condensate field, the development of which would be coordinated with the Shell- operated Assa North field on adjacent OML 21, together referred to as the ANOH Gas project.

But in a swift reaction, Seplat has clarified that the partners have not signed the Final Investment Decision (FID) for the gas project, which is a joint venture with the Nigerian National Petroleum Corporation (NNPC) and could not have violated the Nigerian content law in a project that has not been awarded.

NCDMB has also given AMNI International Petroleum Development Company up till the close of business today (Monday) to explain why it embarked on the deployment of non-compliant expatriates and procurement of several third party services, especially 12-inch and 4-inch coated pipes, for the company’s projects and activities without the approval of the agency.

Seplat Petroleum’s spokesperson, Dr. Chioma Nwachuku, debunked claim by the NCDMB that the company violated the Nigerian Content law in the ANOH Gas project, stressing that the company could not have violated the local content law when the contracts have not even been awarded.

According to her, the NNPC, Seplat and partners have not signed the FID for the project.

“We have not taken the FID. How can we award contracts without funding? Where will the money come from? Seplat and partners have not taken the FID. There is no contract that has been awarded at this stage. We don’t know where they (NCDMB) are getting the report from but we are meeting with them on Tuesday (tomorrow) to give them update,” she explained.

But in a letter with reference number NCDMB/MED/UP/18/049 dated May 14, 2018, NCDMB’s Director of Project Monitoring and Evaluation, Mr. Tunde Adelana, accused Seplat of commencing engineering and fabrication of ANOH Gas Plant for OML 53 through Global Process Systems of UAE, as well as tenders for other integration and construction works without the approval of the agency.

NCDMB argued that Seplat embarked on execution of projects and contracts without obtaining approved Nigerian Content Plans (NCPs), Nigerian Content Compliance Certificates (NCCCs) and other approvals, which capture Nigerian content commitments to be implemented in such projects.

The letter, addressed to the Chairman of Seplat and obtained by THISDAY, alleged that the company issued tenders for integration through ANOH Gas Processing Company Limited or ANOH Midstream Gas Plant Development, a subsidiary of Seplat, which are not known to the agency and are not registered on the Nigerian Oil and Gas Industry Content Joint Qualification System (NOGICJQS).

Adelana, who also summoned Seplat to a meeting with the Board at the agency’s headquarters in Yenagoa, Bayelsa State, on Tuesday, further accused the company of “utilisation of contractors that are not registered on the NOGICJQS, which is the sole system for Nigerian content registration and prequalification of contracts in the industry as provided in the NOGICD Act.”

Seplat, which is listed on both the Nigerian and London Stock Exchanges, was also alleged to have shown “reluctance to submit statutory reports on Nigerian Content, especially but not limited to project performance status reports and other statutory reports.”

“In view of the foregoing, the Board hereby directs Seplat to suspend all ongoing projects/services/contracts, which do not have the Board’s approval and attend a meeting with the Board to address all non-compliance issues with Seplat’s activities in the Nigerian Oil and Gas Industry,” NCDMB added.

In a separate letter addressed to the Managing Director of AMNI, the Board reminded the company that it had earlier requested it to provide a status update on the procurement of 12-inch and four-inch coated pipes with a Nigerian Content Plan to ensure that existing Nigerian pipe coating facilities are utilised.

The Board also noted that it had also requested the company to provide the detailed Nigerian content non-compliance remediation plan to address the deployment of non-compliant expatriates and procurement of third party services for projects without the Board’s approval.

“AMNI is reminded that the due date for the response of the aforementioned actions has elapsed May 3, 2018. Amni is therefore directed to immediately address these issues on or before the close of business on Monday, May 21, 2018,” NCDMB added.

The Board added the Amni’s refusal to close out these actions would result in the applications of sanctions and consequences.

“We intend to build significant parts of the project in country in line with Nigerian Content Development (NCD) guidelines. Seplat believes in the tenets of NCD and has always  aligned with NCD execution strategy. The project in question will have  highly beneficial impacts to energy generation in the country.  As you may be aware seplat has continued to make significant investment in gas production resulting to notable power generation. We   remain committed to sourcing FID to execute this new project in line with NCD,” Nwachuku added.