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Oil firms sue FG over drilling charges

By on May 19, 2013

Three drilling firms on Thursday sued the Nigerian Ports Authority (NPA) challenging charges imposed on them over their activities in the Exclusive Economic Zone (EEZ).

The suits instituted before Justice James Tosho of a Federal High Court, Lagos, were filed by Transocean Sedco Forex, Noble Drilling and Pacific International Drilling.

The plaintiff’s contend in their statement of claim that the NPA had imposed on them, charges running into millions of dollars for drilling within the EEZ.

They averred in their statement of claim, that four oil giants including: Shell, Mobil, Chevron and Total, had engaged their services to prospect for oil within the EEZ.

The plaintiffs averred that as drilling  companies they takes their rigs directly from location at the EEZ, because they do not fall within the definition of “cargo” which must be discharged at the conventional ports.

They also argue that since the Minister of Transport did not declare the EEZ as a compulsory pilotage districts, they were not under any obligation to pay the pilotage dues.

Consequently, the drilling giants filed the suits challenging the NPA’s demands for the charges.

Meanwhile, NPA in their statement of defence contends that under the relevant international agreements, government has the right to prospect for mineral and other resources in the Economic Zone which is about 200 nautical miles from Nigeria’s coast line in the high seas.

The defendant further contends the when the oil giants engaged the services of the plaintiffs to drill the oil well, the plaintiffs  took their rigs directly to the EEZ without the relevant permit.

According to NPA, the rigs are usually brought in from abroad, but before they are moved to the EEZ, the drilling companies must obtain temporary import permits to bring in the rigs as cargos.

NPA said this was to prevent the payment of import duties by the drilling companies.

They also argued that under the provisions of the Customs Act, the rigs should be discharged at regular ports before they are taken to the offshore drilling sites in the EEZ.

According to NPA, the only exception is when the drilling companies obtain waivers to take the rigs directly to the offshore sites, adding that the plaintiffs did not obtain such waiver.

The defendant therefore argue that the drilling companies must pay the dues as stipulated under the Compulsory Pilotage Order of 1996, which declares the EEZ as compulsory pilotage districts.

Justice Tsoho has fixed hearing in the case for Sept. 18.

 

 

[Daily Times]