According to Samsung Heavy Industries Nigeria Limited (SHIN), it did not receive $214 million from Total for the construction of a fabrication yard at Lagos Deep Offshore Logistics (LADOL) Island.

In a report by TheCable, Samsung stated that the payments made to SHIN were part of the Egina floating production storage offloading (FPSO) contract price.

The company also said that it was awarded the contract as a Nigerian company, and that LADOL is merely a shareholder of Samsung Heavy Industries Mega Construction and Integration Free-Zone (SHI MCI FZE) partnership.

This is as there is an arbitration case in a London court over the costs allegedly incurred by SHIN during the construction of the Egina FPSO.

Samsung was awarded a contract in 2010 to construct an FPSO for Nigeria’s Egina deepwater oilfield which has oil deposits in excess of 550 million barrels. According to TheCable:

“Total did not pay Samsung $214 million for the construction of the fabrication yard”.

“Total has consistently stated (including at the February 2018 Senate Inquiry) that it has made no investment in the fabrication yard, and that all payments to SHIN under the Egina FPSO Contract were part of the lump sum contract price.

“LADOL was not “forced” to reduce its interest in SHI-MCI FZE, but voluntarily entered into a revised Joint Venture agreement with SHIN after failing to make the agreed capital contributions relevant to its shareholding under the original Joint Venture agreement”.

The report confirms the existence of an arbitration, which it describes as “confidential”, saying that information about the payments made by Total to Samsung “in connection with their dispute” is also “commercially confidential”.

The crisis of confidence between Samsung and LADOL, which partnered to build the $3.3 billion Egina vessel, has remained unsolved after several court cases and promises by the federal government to help make peace.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: