Tension Rises in N’Delta over $18.5m Oil Pipeline Surveillance Contract

Sylvester Idowu in Warri

Tension has started building up in Delta State due to the decision of the Nigerian National Petroleum Corporation (NNPC) to award oil infrastructure surveillance contract to Ocean Marine Solution Limited contrary to extant rules.

Multiple sources told THISDAY at the weekend that the NNPC approved a contract for the surveillance of the 87-kilometre Trans-Forcados Pipeline (TFP) to Ocean Marine Solution Limited at a whopping $18.48 million on September 26.

Consequently, thousands of youths and ex-militants from 111 host communities to OML 30 assets described NNPC’s decision an impending chaos in the Niger Delta, thereby demanding reversal of the contract.

The youths alleged that the NNPC alliance with Ocean Marine was about to deprive them of their livelihood; render thousand of them jobless and in effect fuel a new round of unrest in the host communities.

According to the terms of reference of the contract, it is meant to last for five renewable months, coming with some other conditions spelling out penalties that may attend loss of products or breaches to parts of the length of the pipeline.

Contrary to the terms of reference, one of the sources said the contract has started raising eyebrows amongst stakeholders because due process was followed.

Already, the source said those concerned with due diligence in governance, especially as in the oil and gas sector, faulted arbitrary and unexplained inflation of the contract sum and NNPC’s decision to beat the standing rule that no ministry, department and agency could award a contract that is up to $20million in value.

Speaking on the allegation, Spokesman of Ijaw Youths Council (IYC), Mr. Daniel Dasimaka highlighted the inherent security threat associated with the new contract approved by the NNPC to Ocean Marine.

In a statement he issued yesterday, Dasimaka said the NNPC might not have paid attention “to threat the new contract poses to the peace and security of the communities and Delta state as a whole.

“There is a running contract, approved by the operators of the assets to a contactor that has been doing an awesome job on the assets; no reports of negative incidences and the communities are happy.

“Imagine the sort of tension that has attended this new approval in just a few days, the silent and cold wars. This is a latent crisis situation on our hands, I will not buy the narrative that they never envisaged a war from this.

“Why award an already running contract to another company and the contract now inflated to about five times the rate of the initial contract? Awarding a security job to two different companies, in an area that is considered volatile is a perfect recipe for chaos and sabotage to relative peace in Niger Delta.”

Also speaking on the new contract, a transparency crusader, Mr. Tamara Adie objected to the manner the new oil surveillance contract was awarded and the unusually inflated price tag placed on it.

First, Aide claimed that it violated the Public Procurement Act, which is the statutory rule guiding how public contracts and services are awarded.

He noted that the act “stipulates that no contract from the tune of $20million can be awarded by any MDA, without deliberation and the express permission of the federal executive council.

“This approval by the NNPC, although cleverly spread so that it will look like it has not knocked the $20 million threshold, has violated that act.”

Aside, Aide claimed that the operator of the asset, Heritage Energy Operational Services Ltd and Shoreline Natural Resources, as shrewd business people, had refused to agree to the new contract terms with Ocean Marine because of the inflated value, which theywouldpay through ‘Cash Call.’

He said, “When NPDC could not proceed with signing off on the contract because the Joint Venture Partners had declined, NNPC took it upon itself to award the contract claiming that an Executive Order issued from Presidency demands that the contract be awarded immediately.

“There are many questions they have to answer; what is the rational for re-awarding a running contract to a new contractor, at a value almost four times the rate it had previously been awarded to the former contractor?”

In response, General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu, declined comment, though asked THISDAY to direct its inquirythe corporation’s WhatsApp platform.