The Senate, on Tuesday, mandated Total Upstream Nigeria Limited to reverse the canceled bidding contracts involving over 10 indigenous vessel owners.
According to the upper chamber, the action of the multinational oil giant is a violation of Nigeria’s Oil and Gas Industry Content Development Act.
The Indigenous Vessels Operators Association of Nigeria had petitioned the Senate Committee on Nigerian Content on the alleged cancellation of bids by its members for the provision of Platform Support Vessels (PSV) and Terminal Support Vessels (TSV) by Total.
The Senate, therefore, ordered Total Nigeria and National Petroleum Investment Management Services (NAPIMS) to resume bidding to include the local vessel contractors left out in the initial tendering opportunity that was canceled.
Sen. Solomon Olamilekan, the Chairman, Senate Committee on Local Content, gave the directive during investigative hearing, where Total Nigeria, Indigenous Vessel Owners Association of Nigeria and NAPIMS were invited by the Committee.
The local contractors alleged in the petition that the action was carried out against them to pave the way for other bigger local vessel operators, where Total Nigeria and NAPIMS allegedly had vested interest.
He expressed concern over alleged irregularities which he said were clear violations of extant laws in the oil and gas sector and the Procurement Act.
However, Mr Abiodun Afolabi, the Executive Director, Corporate Services, Total Nigeria, denied any wrongdoing, claiming that the company did not in any way violate the law in handling the tender initiated since 2012.
He pointed out that there was need to change strategy because of the long gestation period it took for contracts in the oil sector to be completed.
Wading into the affair, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru restated the Corporation's commitment to the development of local content in the Nigerian oil and gas industry.
Addressing the committee, the GMD who was represented by the Group General Manager, National Petroleum and Investment Management services (NAPIMS), Roland Ewubare, said “every serious economy grows on the strength of the private sector, so it behooves on us to support them and NNPC is fully committed to it", he noted.
On the alleged contravention of the Nigerian Content Act by Total, the GMD said the company was one of the IOCs that has a preference for local companies and assured the committee that the concerns of both the Vessel Owners and Total would be addressed.
He however appealed to the committee to write the Nigerian Content Development and Monitoring Board (NCDMB) for a waiver of the grading system which led to the cancellation of the bids to allow the already prequalified companies to go on with the process in the national interest.
Ewubare further appealed for six to nine months to sanitise the process, including eliminating “portfolio” local contractors in the business value chain.
Earlier, the Solicitor of the Indigenous Vessels Operators Association of Nigeria, Mr Bassey Offiong, had asked the Senate Committee on Local Content to intervene to stop Total Nigeria Limited from cancelling the bidding contract it entered with the association’s members in 2012.
“The bid process, which had the participation of NAPIMS, NNPC and the NCDMB attracted bids from a variety of Nigerian owned ships and vessels operators and duly complied with the provisions of all extant laws such as the procurement Act and the Nigerian Oil and Gas Industry Content Development (NOGICD) Act."
“This bid also underwent all the stages of the process remaining only the award to the deserving winners,” Offiong said.